Germany's KarstadtQuelle, owner of tour operator Thomas Cook, agreed Monday to merge with British package holiday company MyTravel.
The deal is being billed as a merger of equals, with Thomas Cook holding 52% of the combined company, with 48% held by MyTravel shareholders. The new company will be named Thomas Cook Group and be listed on the London Stock Exchange, Reuters reported.
The deal, to be completed by June, will result in cost savings of about $146 million, according to Reuters.
KarstadtQuelle CEO Thomas Middelhoff CEO will chair the new company.
"Markets are starting to consolidate in the tourism business and we thought a market player like Thomas Cook, European-wide the No. 2, should be actively pursuing its options in this consolidation process," Middelhoff told "Power Lunch Europe." "And at the same time we have to prepare the new merger company for things like the growing e-commerce activities or special premium offers.”
KarstadtQuelle agreed to buy the 50% of Thomas Cook it did not own from Deutsche Lufthansa in December for 800 million euros.