United Kingdom-based travel firm, Thomas Cook has recently been acquired by the Chinese conglomerate firm, Fosun. Fosun has bought the firm for $14.2 million following the travel agency was snapped and left almost 140,000 tourists stranded abroad, reported The Economic Times.
In September 2018, the travel firm collapsed, sacking 22,000 employees across the globe. This has been deemed Britain’s biggest repatriation after World War II as the British government paid to fly home 140,000 tourists, who had taken Thomas Cook’s travel services.
In the same month, Thomas Cook proclaimed that it is bankrupt as it was unable to receive a financial backing of $250 million from private investors.
Why is Thomas Cook India Unaffected by the Deal?
Despite the depressing phase of Thomas Cook, some of its bureaus are not affected by its shutdown and are operating normally. India, Srilanka, and Mauritius are the countries that are included in the acquisition deal between Fosun and Thomas Cook.
“With regard to recent media reports pertaining to the sale of the Thomas Cook Global brand to Fosun of China, it is imperative to clarify that the reported sale of the Global Thomas Cook brand to Fosun of China does not include the regions of India, Sri Lanka and Mauritius,” Mr.Madhavan Menon, Chairman, and Managing Director, Thomas Cook (India) Ltd. said.
The brand for these markets has been and continues to be protected for exclusive use by Thomas Cook India Limited (TCIL) until November 2024 as per a brand License agreement entered into in 2012 between Thomas Cook India's promoters (since 2012) Fairfax Financial Holdings and the erstwhile Thomas Cook Plc," Menon added.
The Indian bureaus are not governed by the parent company, Thomas Cook. Thomas Cook India Limited (TCIL) is controlled by Fairbridge Capital (Mauritius) Limited, a business unit of Fairfax Financial Holdings Limited, which owns 66.90 per cent shares in the company. Thus, Fairfax Capital oversees for the execution of investment as well as acquisition opportunities.
Therefore, when Thomas Cook was grappling to keep itself afloat in the market, TCIL continues to carry out its operations in 29 countries in the Asia-Pacific region. In spite of debt hampered operations of Thomas Cook in the previous year, TCIL firmly operated its team of more than 9700 and amalgamated a revenue over INR 6718.7 crore in the financial year 2018-19.
Following the acquisition of Thomas Cook, The Economic Times reported citing Qian Jiannong, the Chairman of Fosun's travel arm, statement, “The acquisition would build upon Fosun's existing tourism holdings and "the robust growth momentum of Chinese outbound tourism."
According to the cited media report, as part of the purchase agreement, Fosun will take ownership of the brand rights to Thomas Cook, as well as subsidiary hotel chains, Casa Cook and Cook's Club.