China's Fosun buys 5 percent stake in British travel group Thomas Cook
Fosun paid 91.9 million pounds for the stake and will seek to double its holding in Thomas Cook to 10 percent.
Chinese conglomerate Fosun International said it bought a 5 percent stake in British travel group Thomas Cook Group deepening its foray into Europe's tourism sector after buying French holiday maker Club Med last month.
Fosun paid 91.9 million pounds ($140.12 million) for the stake and will seek to double its holding in Thomas Cook, the world's oldest travel group, to 10 percent, it said in a filing to the Hong Kong stock exchange on Friday.
Thomas Cook said in its statement that it expected the tie-up to be earnings accretive in the financial year ended September 30 2016, assuming plans under the partnership were implemented in 2015.
One of the plans was to explore collaboration opportunities with Club Mediterranee SA (Club Med), where Fosun is looking to turn around a business struggling in Europe and move more aggressively into fast-growing markets such as China.
"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 in the filing. He said there was "increasing demand for international leisure travel".
Thomas Cook said the deal would help accelerate plans to develop more specialised hotels and, over the medium term, it would open up the Chinese tourism market to the company as the pair develop hotel brands tailored to the Chinese market.
Fosun's purchase, in the form of a new share issuance at 125.59 pence a share, is being undertaken by Fosun's subsidiary Companhia de Seguros. The price represents a 4.1 percent premium to Thomas Cook's closing price on Thursday.
Thomas Cook is in the middle of a cost-saving plan, but aims to grow this year despite facing tough trading conditions in mainland Europe. It made a loss of around $80 million in the three months to Dec. 31 last year.
Fosun's bid for Club Med which valued the firm at around $1.15 billion, was finalised in early February.
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