Kuoni plays down Thomas Cook merger talks

Upmarket travel group Kuoni today played down rumours that it was involved in merger talks with travel agency Thomas Cook.

A Sunday newspaper reported that the two firms were holding discussions over creating a single group, combining two of the best known names in travel, which would have annual sales of around €10.5bn and a stock market value of €1.5bn.

The report said the enlarged group would be listed in Switzerland, but retain large operations in the UK and Germany, and Stefan Pichler, the chairman and chief executive of Thomas Cook, would become head of the new company.

It claimed talks between the two parties started in March when they got together to discuss combining some of their airline operations.

But Kuoni today claimed that while talks had been held about their airlines, they had never developed into merger discussions.

Spokesman Stephan Wehrle said: “We do not comment on rumours and speculation. There are no talks between Thomas Cook and Kuoni.

“We had talks not only to Thomas Cook but also to others, which is quite normal in this industry, in March, but not regarding a merger.”

A Thomas Cook spokeswoman said: “We do not comment on market rumours and speculation.”

The reports come at a time when the holiday industry is trying to recover from the impact of SARS, the war with Iraq, global terrorism and sluggish European economies.

It is thought if any merger did go ahead it would lead to further consolidation in the travel industry.

Kuoni has previously tried to merge with UK holiday group First Choice in 1999, but talks ended following a counter bid from Airtours, now known as MyTravel.

Thomas Cook, which is 50% owned by airline Lufthansa and 50% by German retail group KarstadtQuelle, reported sales of €8bn last year, €2.7bn of which were in the UK.

It made a pre-tax loss €134.8m.

Last month it announced plans to reduce its workforce by a further 600 jobs as part of cost-cutting measures meant to offset a weak economy and a drop in bookings.

The reduction, which would be achieved through a hiring freeze that was announced in February, would bring the total number of job cuts planned by the end of 2003 to 1,200, following a reduction of 2,600 from its 28,000-strong workforce last year.

Kuoni had sales of €2.4bn last year, and net profits came in at €17m, beating expectations.