China's Fosun International said it bought a 5% stake in British travel group Thomas Cook Group, deepening its foray into Europe's tourism sector after buying French holidaymaker Club Med last month.
Fosun paid £91.9m for the stake and will seek to double its holding in Thomas Cook, the world's oldest travel group, to 10%, it said in a filing to the Hong Kong stock exchange today.
Thomas Cook said it expected the tie-up to be earnings accretive in the financial year ended September 2016, assuming plans under the partnership were implemented in 2015.
One of the plans was to explore collaboration opportunities with Club Mediterranee (Club Med), where Fosun is looking to turn around a business struggling in Europe and move more aggressively into fast-growing markets such as China.
"The investment in Thomas Cook complements other recent investments of the group in the sector, providing opportunities for further value creation," Fosun chairman Guo Guangchang said in the filing.
He said there was "increasing demand for international leisure travel".
Thomas Cook said the deal would help accelerate plans to develop more specialised hotels and, over the medium term, it would open up the Chinese tourism market to the company as the pair develop hotel brands tailored to the Chinese market.
Fosun's purchase, in the form of a new share issuance at 125.59 pence a share, is being undertaken by Fosun's subsidiary Companhia de Seguros. The price represents a 4.1% premium to Thomas Cook's closing price yesterday.
Thomas Cook is in the middle of a cost-saving plan, but aims to grow this year despite facing tough trading conditions in mainland Europe.
It made a loss of around $80m in the three months to December 31 last year.
Fosun's bid for Club Med, which valued the firm at around $1.15 billion, was finalised in early February.
