Thomas Cook acquires Turkish travel specialist Öger Tours
ISTANBUL - Hürriyet Daily News | 7/12/2010 12:00:00 AM |
Vural Öger, a German politician of Turkish descent, is selling the Germany-based Öger Tours to Britain’s Thomas Cook Group. The acquisition does not include Öger Türk Tur Ltd, which runs operations in Turkey. The acquisition, expected to be finalized in September, is a strategically important step for Thomas Cook as it tries to build stronger business in the German market, according to Chief Executive Manny Fontenla-Novoa
Öger Tours GmbH, a German tour company which has offered holiday packages to Turkey for decades, will soon be acquired by Britain’s Thomas Cook Group for an undisclosed sum, according to the company’s founder.
The firm is set to sell 100 percent of its shares to Thomas Cook, according to Vural Öger, the company’s founder and a former member of the European Parliament of Turkish descent.
The British travel giant plans to acquire Öger for 30 million euros, as “the net debt for the last 12 months and similar items are included” in the sum, Öger said.
Founded in 1969, Öger Tours is well-known in Germany for its holiday packages to Turkey and served more than 400,000 passengers in the fiscal year that ended on Oct. 31, 2009. Öger’s gross revenue in the period was 256 million euros, while operating profit stood at 3.3 million euros. Öger Tours expects a rise in income and profit this year.
As part of the deal, companies under the Öger Tours umbrella agreed to provide for Thomas Cook some agency and accommodation services in Turkey, which amounts to 2.5 million euros.
Along with the Öger offices in Hamburg, Thomas Cook will continue to use the Öger brand and as an expert operator in Turkey and its region, the press release said.
The acquisition does not include Öger Türk Tur Ltd., which runs operations in Turkey, and Öger’s other companies in Turkey.
"The talks between parties started six months ago,” Öger told Anatolia news agency on Monday. “Due to mutual contracts, I have undersigned the deal to sell all shares to Thomas Cook. This is a fine deal for both parties. The future of Öger is guaranteed."
Öger also said the company would continue its activities in Europe as a "Turkish brand," adding that he and Thomas Cook will work together to develop Turkey’s potential as a tourist destination.
With the deal, Öger predicts it will generate a synergy of 8 million euros annually due to a fall in operation expenses, use Thomas Cook's Condor Airlines to a greater degree and make collective purchases at more convenient prices.
[HH] A strategic acquisition
Thomas Cook aims to strengthen its position as one of the largest tourism operators in Europe and develop its business in Turkey.
Buying Öger is a strategically important step for the company, which hopes to build a stronger business in the German market, said Thomas Cook Chief Executive Officer Manny Fontenla-Novoa.
Noting that Thomas Cook was happy to begin its partnership with Öger, Fontenla-Novoa said, "I believe this is an attractive acquisition."
European travel companies tend to increase sales and avoid any rise in costs, Hüseyin Özyurtçu, owner and board chairman of Picasso Travel in the U.S., told the Hürriyet Daily News & Economic Review.
"The margins in the travel industry are falling constantly," said Özyurtçu. "This is why big companies tend to acquire consolidated and growing companies."
German AERTickets bought 60 percent shares of Özyurtçu's Picasso Travel in 2008.
Speaking to the Daily News, Peter Hyde, a leisure and transport analyst at Liberum Capital in London, said the acquisition is "a good buying opportunity" for Thomas Cook.
“Thomas Cook and TUI Travel shares are reflecting recent consumer [spending] worries, but we believe they will begin to pick up as companies demonstrate renewed positive margin progression through the fourth quarter,” he said.
Öger and his daughter Nina, who currently manage the company, will leave their posts but continue to support and consult Thomas Cook.
He told the news agency that he had joined the supervisory and management boards of the British company.
The parties plan to finalize the acquisition process by September, depending on antitrust clearance from the European Union.
Ali Kayalar from Istanbul contributed to this report.