The new Chinese owner of Club Med has taken a 5% stake in Thomas Cook to begin a “stretegic partnership”.
The investment by Fosun, which bought French resort firm Club Med only weeks ago, is aimed at giving both Fosun and Thomas Cook access to new markets – with Thomas Cook hoping for access to China’s growing tourism sector in the “medium term”.
Fosun told the Hong Kong stock exchange it paid £91.9m for the shares and said it would seek to double its holding in Thomas Cook, the world’s oldest travel group, to 10% with purchases on the open market.
The deal could help Fosun promote holiday packages at Club Mediterranee SA, which is widely known as Club Med, as it looks to turn around the firm’s struggling business in Europe.
“The investment in Thomas Cook complements other recent investments of the group in the sector, providing opportunities for further value creation,” Fosun chairman Guo Guangchang said.
Thomas Cook, which lost its chief executive Harriet Green late last year, remains in the middle of a cost-saving plan but aims to grow this year despite also facing tough trading conditions in mainland Europe.
New chief executive Peter Fankhauser said: “Our partnership with Fosun is aimed at accelerating our profitable growth strategy by allowing us to further develop our differentiated product in our core destination markets, to collaborate with Fosun’s other portfolio businesses particularly in France, and to access the world’s largest and fastest-growing tourism markets with an experienced local partner.
“We are looking forward to working closely with Fosun’s team to execute the commercial opportunities we are developing.”
Thomas Cook’s statement said it expected the tie-up to be earnings accretive in the financial year ended 30 September 2016, assuming plans under the partnership were implemented in 2015.