Thomas Cook has confirmed it will merge its high-street store network with rival The Co-operative Group to create the largest chain in the UK.
In a move designed to “strengthen the competitive position” of both chains in the market, the new group will trade from 1,204 locations across the country.
Foreign exchange businesses operated by both partners will also be included in the deal. However, while both will maintain their own branding, some 70 outlets of Thomas Cook subsidiary Going Places will take up the Co-operative Travel brand.
The new company will be 70 per cent owned by Thomas Cook and 30 per cent by The Co-operative Group, with hopes of synergies of £35 million a year in the merged entity.
Thomas Cook has already mooted the possibility of job cuts, with analysts suggesting further reductions in employee numbers could follow the new deal.
Thomas Cook Group chief executive Manny Fontenla-Novoa will serve as chairman of the new company, while Ian Derbyshire will serve as chief executive and Paul Hemingway as finance director.
Derbyshire is currently chief executive of Thomas Cook’s UK business while Hemingway is finance director of Co-operative’s Travel and Specialist Retail businesses.
Mr Fontenla-Novoa said: “This transaction represents a significant consolidation opportunity in the UK travel market and, by joining forces, we will create the country’s largest high street travel network and reach a far wider customer base.
“By consolidating the high street in tandem with delivering on our existing e-commerce targets, we are realising our strategic aim to increase in-house distribution and strengthening our proposition to consumers.”
Thomas Cook’s online operation is not included in the deal.
The merger will see the Co-operative Travel shops start to sell Thomas Cook products, which the two firms said in a joint statement would “provide significant opportunity to drive additional sales”.
Peter Marks, group chief executive at the Co-operative group, said: “Through our new found scale we will secure a profitable and successful business together, which will be good for our people and our members.
“Our customers will also benefit as we work to ensure that the merger leads to enhanced value in the holidays that we offer,” he concluded.