German firm buys Thomas Cook

The market for package travel in Europe is hugely competitive

The UK's third-largest tour company Thomas Cook is being sold to Germany's second-largest travel firm C&N Touristic for 885m euros (£550m).

The deal, reached with controlling shareholder Carlson, ends months of uncertainty for the British tour group.

Its future had been in the balance after the firm's largest shareholder, Preussag, the biggest package holiday group in Germany, sold its 50% stake in Thomas Cook after buying Thomson Travel earlier this year.

Thomas Cook tours

Club 18-30

JMC holidays

Neilson (active holidays)

Time Off (European short breaks)

It had been ordered to do this on anti-trust grounds.

John Donaldson, the chief executive of Thomas Cook, welcomed the deal: "I firmly believe that the successful travel companies of the future will be those that operate on a global scale," he said.

Stefan Pichler, chief executive of C&N, added that the German group was "delighted".

"After Gemany, the UK is by far the biggest package holiday market, and the two markets together account for roughly half the travel volume in Europe," he added.

Fighting for market share

The deal means that two of the top three holiday companies in the UK are now owned by German firms, with only Airtours remaining independent.

C&N, which will now become the second-biggest European travel company after its rival Preussag, is jointly owned by airline Lufthansa and retailer Karstadt.

Earlier this year, there was speculation that it was in talks to buy First Choice, one of the biggest UK tour operators.

The two companies are bitter rivals on the German and European travel markets and are fighting hard to retain market share.

C&N had also wanted to gain control of Thomson Travel, but it was beaten by Preussag.

C&N is keen to expand outside Germany, where it still makes 75% of its profits.