Thomas Cook merges Condor with Air Berlin

Tags :Continental Europe, Air Berlin


(CAPA) Thomas Cook Group announced plans to merge its stake in Condor Flugdienst with Air Berlin, enabling Air Berlin to enlarge its long-haul business. Both partners expect positive synergies of at least EUR 70 million from the merger.

 

As part of the agreement, Thomas Cook will receive at least EUR 500 million in shares and cash and has the option to gain a total amount of EUR 600 million over the positive share price development of Air Berlin. The transaction is subject to the approval by the cartel authorities.

75.1% of Condor Flugdienst Gmbh belongs to Thomas Cook Group and 24.9 % to Deutsche Lufthansa AG. The agreement about the mutual shareholdings between Air Berlin and Thomas Cook is still subject to Deutsche Lufthansa AG not asserting a contractual preemption right. The acquisition of 75.1% of Condor by Air Berlin will be completed by 10-Feb-09. For the remaining 24.9%, Thomas Cook will exercise its call options and afterwards will assign the shares to Air Berlin.

Air Berlin already offers a range of service connections between hubs including Düsseldorf, Berlin and Mallorca. Through the integration of Condor, Air Berlin will be able to increase the attractiveness of its offering at Frankfurt, Munich and Hamburg. 

As Manny Fontenla-Novoa, CEO of Thomas Cook’s stated: "The agreement aims at reducing risk and maximizing flexibility. This transaction will create significant value for the shareholders of Thomas Cook and secure the long-term future for Condor. As the biggest shareholder of Air Berlin, we are benefiting from Air Berlin’s extensive flight offer. Together, we have a significant potential for growth. Furthermore, Air Berlin will remain a long-term strategic partner for Thomas Cook and provide us with flight capacities."

Joachim Hunold, Air Berlin’s CEO, explained: "In light of the quickly progressing concentration process of European aviation, integrating Condor into the Air Berlin Group secures the future for both companies. Together, we will achieve international competitiveness. This step makes sense, especially following the takeover of LTU, since it will enable us to offer our clients a more tightly-meshed long-haul flight network.

Ludger Heuberg, CFO of Thomas Cook Group, emphasized that exchanging Condor shares for Air Berlin shares will increase profits per share for the shareholders of Thomas Cook: "The participation in the new Air Berlin is worth more than a 100 percent participation in Condor." Thomas Cook will consolidate its share in Air Berlin at equity.

Ulf Hüttmeyer, CFO of Air Berlin, said: "Earnings per share for Air Berlin will not decrease through Thomas Cook’s investment in 2009. They will more likely increase through the synergies that we will achieve."

Founded in 1955, Condor Flugdienst currently has a fleet of 35 aircraft and transported 7.8 million passengers last year. Sales volume amounted to EUR 1.2 billion. While Condor, like LTU, mainly focused on tour operators and travel agencies for its sales, Air Berlin concentrated on single-seat sales and sales over the Internet. Moreover, Air Berlin already has a high percentage of business travelers. Last year, Air Berlin transported 19.7 million passengers. Sales volume in 2006 amounted to EUR 1.57 billion. At present, the Air Berlin Group operates a fleet of 131 aircraft.

Date posted: 21-Sep-07 

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