15th Jun 2015 06:41
LONDON (Alliance News) - Thomas Cook Group PLC Monday said it will establish a joint venture with Fosun International Ltd to develop domestic, inbound and outbound tourism activities for the Chinese market under Thomas Cook brands, a move that comes after the two companies in March formed a strategic partnership to look for opportunities in the Chinese market.
The joint venture will be 51% owned by Fosun and 49% by Thomas Cook. The two companies will put a total of GBP1.6 million into the venture to support its start-up, roughly half each. Further funding will need the unanimous approval of the board of the joint venture, which will be made up of two from Thomas Cook and two from Fosun.
Fosun International, chaired by Chinese billionaire Guo Guangchang who started the investment group with three friends whilst at university back in 1992, in March bought a 5% stake in the UK travel operator and said it plans to increase its stake to 10% by buying shares in the open market over time. They pledged to cooperate internationally in a number of business areas, including potential new growth areas. That included looking at creating a hotel investment platform under a partnership model, including developing a hotel brand tailored to the Chinese leisure market.
"Today marks a significant milestone in our strategic partnership with Fosun. We are excited at the prospects of entering the largest and fastest-growing tourism market in the world with such an experienced partner," Thomas Cook Chief Executive Peter Fankhauser said Monday.
"Today, there is a lack of innovation and differentiation in the travel product offerings for Chinese tourists in China and abroad, presenting an excellent opportunity for our new joint venture to gain a competitive advantage," Qian Jiannong, president of Fosun's Tourism & Commercial Group said.
Thomas Cook will nominate the general manager and finance manager of the joint venture, while Fosun will nominate the deputy general manager. Reto Wilhelm, currently managing director of Thomas Cook's Eastern and Western European businesses, will take up the position of general manager.
"Over his 30-year career in the travel industry, Reto has gained significant experience of the Chinese travel market, including in his previous role as executive board member of the Kuoni Group where he headed Kuoni's Asia and China division," Thomas Cook said.
The two companies expect the venture to be operational in the autumn, once it gets the relevant regulatory approvals and licenses.
By Steve McGrath; [email protected]; @stevemcgrath1
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