The UK-based Thomas Cook Group plc, Europe's second-biggest travel company, has acquired a controlling 74.9-per cent stake in its Indian arm, Thomas Cook India Ltd.

Under the terms of the TCIL transaction, Thomas Cook has agreed to acquire at least 61.8 per cent and up to 74.9 cent of TCIL's share capital through its UK subsidiary, Thomas Cook UK.

Thomas Cook Group said in a statement, "Thomas Cook Group plc on March 07, 2008 announces that it is acquiring up to 74.9 per cent of the issued share capital in Thomas Cook India Ltd…"

The statement added that the UK company was also acquiring a 100-per cent stake in the Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in 15 Middle East countries, and cancel the brand licensing and non-compete agreement in theses countries, where it had licensed the brand name to Dubai Financial Group.

Thomas Cook now has control of the brand worldwide.

"The acquisition of Thomas Cook India allows Thomas Cook to capitalise on the anticipated strong growth and development of the Indian economy, which we expect to be mirrored by even stronger growth in travel," the statement quoted group chief executive Manny Fontenta-Novoa. "Thomas Cook has a long and enviable history in India dating back to the 1880's and the brand name has become one of the country's best known.

Thomas Cook is purchasing the businesses from Dubai Financial Group LLC for total cash consideration of between €208 million and €249 million, subject to the outcome of an open offer process.

Thomas Cook India along with Dubai Financial LLC owns a 61.78-per cent stake in the Indian operations. Banks, institutions and mutual funds own over 10 per cent in the travel operator.

In a private transaction with Dubai Financial Group, Thomas Cook will acquire 54.9 per cent of this for the equivalent of Rs107 per share of Thomas Cook India. As required by law Thomas Cook is tendering to acquire up to a further 20 per cent through an open offer at the same price per share.

Accordingly, Thomas Cook will acquire between 61.8 per cent and 74.9 per cent of TCIL's share capital, the price of with will range from €173 million to €214 million giving Thomas Cook control of the Indian operations it started in 1881.

Thomas Cook will pay a cash consideration equivalent to €35 million to Dubai Financial Group for both the Egyptian business and the return of the brand licenses in the 15 Middle Eastern countries. The licensing agreement with Dubai Financial Group for the brand in these 15 countries will be terminated and Thomas Cook will acquire exclusive ownership of the Thomas Cook brand worldwide.

The transactions will be funded from the Group's internal resources and are expected to close at the end of March and the open offer for up to a further 20 per cent stake in Thomas Cook India is expected to close at the end of May 2008."

Thomas Cook India is the largest foreign exchange and second largest travel operator in India with gross revenue from the two divisions being split equally. Through its acquisition Thomas Cook will become a leader in one of the fastest growing travel markets.

The UK company said the acquisition was in keeping with its strategy to expand into emerging markets that represent a great growth potential as well as to strengthen its financial services business and expects the Indian business to "grow significantly"

Fontenta-Novoa adeed, "The acquisition of TCIL allows Thomas Cook to capitalise on the anticipated strong growth and development of the Indian economy, which we expect to be mirrored by even stronger growth in travel.," the statement quoted group chief executive Manny Fontenta-Novoa. "Thomas Cook has a long and enviable history in India dating back to the 1880's and the brand name has become one of the country's best known.

"Adding what is one of India's largest travel and financial services businesses to our portfolio will allow us to take full advantage of the growth prospects that this market offers and fully supports our strategy of entering the fast developing emerging markets and expanding our financial services businesses."

The Indian company has a retail network of around 180 outlets across 40 cities. In the last two years it has significantly expanded its business and strengthened its market position by acquiring LKP Forex, its largest competitor in the foreign exchange business, and Travel Corporation of India an inbound operator.

The Group expects full year 2007 profit after tax in excess of €8.4 million and full year 2007 EBITDA to be around €16.7 million.

"This is a proud moment for Thomas Cook India as we come back under the auspices of the parent brand," said Udayan Bose, chairman, Thomas Cook India. "Our relative market shares in both the financial services and travel operator businesses have both grown substantially. Set against the backdrop of a rapidly growing tourist market, I believe the business is in great shape for the future."

Sayanta Basu, chief executive officer, Dubai Financial Group, said, "We are very pleased to be returning Thomas Cook India to its parent organisation to be part of the global Thomas Cook family. We believe we have added strength and value to the business and are very pleased with returns we have made on our investment."