Thomas Cook’s Latest Buy May Boost Sales By $350 Million
Thomas Cook India Ltd. will acquire the foreign exchange and travel services business of Tata Capital as it looks to strengthen its corporate portfolio.
The board signed a definitive agreement to acquire Tata Capital Forex Ltd. and TC Travel and Services Ltd., according to a media statement by Thomas Cook. The network of the two acquired units includes 24 locations across India, the statement said.
The company didn’t disclose the financial details and the deal is subject to regulatory approvals. “It is not a large acquisition if you look at the monetary value, but it gives Thomas Cook a wider distribution network in the corporate space,” Madhavan Menon, chairman and managing director at Thomas Cook, told BloombergQuint over the phone.
The forex business will add another $300 million to sales, while the travel services business will add $50 million, Mahesh Iyer, chief executive officer of Thomas Cook, added.
The acquisition will result in a “significant increase in scale and network reach, volume/buying advantages” and better customer service, Menon said in the media statement.
Menon said Tata Capital approached Thomas Cook to divest the two units as it did not fit in their core business structure. “We saw it as an adequate opportunity to strengthen distribution and supplement our travel services,” Menon said. The deal will also allow them to enhance their relationship with the Tata Group and penetrate Tata businesses “a lot more than we already do”.
Shares of Thomas Cook recovered in the last half hour of trading to close 0.8 percent up. The benchmark BSE Sensex ended 0.9 percent lower.