It has been a busy week for the Competition Commission.
On Monday the British government body told an unhappy BAA it must sell both Stansted Airport and one of its Scottish properties – Glasgow Airport or Edinburgh Airport - and today it was the turn of Thomas Cook to discover its fate with regard to a proposed merger with Co-operative Group and Midlands Co-operative Society.
Luckily for the tour operator, the commission was in a more forgiving mood, provisionally approving the link-up and potentially creating the largest travel retail chain in the UK.
Once finalised, the deal will bring together three of the biggest travel agents presently operating in the UK.
Thomas Cook itself currently operates 780 stores across the country, while the Co-op has 360 travel shops and the Midlands 100.
Thomas Cook will contribute its retail travel agency business to the joint venture but not its tour operating business or its Internet travel agency businesses.
It will own 70 per cent of the combined entity and the Co-op the remaining 30 per cent.
The deal will also create the second biggest high street foreign exchange business after the Post Office.
In a statement on Thursday, the commission said it had concluded the acquisition would not result in a substantial lessening of competition in the UK, in particular for customers buying package holidays from high street travel agents.
Future of Thomas Cook
The news could not have come at a better time for beleaguered Thomas Cook, which announced a “fundamental review” of its activities earlier this month following the issuing of its third profit warning in a year.
Investment bank Morgan Stanley went on to warn high fixed-costs, stretched balance sheets, and a number of other concerns could pose significant risks for Thomas Cook in the mid-term.
Thomas Cook shares have lost over two-thirds of their value since January, closing on Wednesday at 68.45 pence per share.