New | Fosun buys into Thomas Cook Group as conglomerate boosts overseas investments
Fosun International, which has been snapping up tourism assets as part of a buying spree abroad, has gained a foothold in the British holiday market with a 5 per cent stake in Thomas Cook Group.
Fosun, controlled by Guo Guangchang, paid £91.9 million (HK$1.08 billion) for the stake in the world’s oldest travel group, and plans to double that holding, it said in a statement to the Hong Kong stock exchange on Friday.
China’s overseas investment in tourism jumped tenfold to a record US$6.19 billion in 2014, from US$618 million in 2013, according to Mergermarket, which tracks mergers and acquisitions.
Fosun made the Thomas Cook acquisition through its Portuguese insurance subsidiary Fidelidade-Companhia de Seguros.
The conglomerate plans to acquire more shares of Thomas Cook in the open market “at the appropriate time” to increase its stake to 10 per cent, Fosun added.
Thomas Cook’s strong brand heritage and leading position in the European travel market, together with (Fosun’s) expertise and resources, will capitalise on the increasing demand for international leisure travel
London-listed Thomas Cook had sales of £8.5 billion in the fiscal year to September 2014. It has 27,000 employees.
“Thomas Cook’s strong brand heritage and leading position in the European travel market, together with (Fosun’s) expertise and resources, will capitalise on the increasing demand for international leisure travel,” Fosun said in the statement.
“The investment in Thomas Cook complements other recent investments of the company in the sector, providing opportunities for further value creation.”
By February 12, the Gaillon Invest II consortium, of which Fosun controls more than 80 per cent, bought 92.8 per cent of French resort company Club Med.
Excluding Fosun’s investment in Thomas Cook, this year has seen two Chinese overseas investments in the leisure sector – covering travel companies, hotels and restaurants – with a total value of US$31 million, according to Mergermarket. Last year 19 Chinese overseas investments hitting a record US$6.19 billion were made in the sector, including Hony Capital’s purchase of Pizza Express and HNA’s acquisition of NH Hotels, according to Mergermarket.
Seven deals in Europe with a total value of US$4.7 billion accounted for 75.8 per cent of the value of Chinese overseas investments in the sector last year, said Mergermarket said. A further 22.1 per cent of the value of Chinese outbound investments in leisure last year came from eight investments in Australia.
