German firm 'to buy First Choice'

First Choice is a leading operator to the Mediterranan

German tour operator C&N Touristic is reported to be in talks to buy First Choice, one of the biggest UK tour operators.

Press reports say that the company, jointly owned by Lufthansa and Karstadt Quelle, has already had detailed discussions with First Choice.

C&N failed in its bid to obtain Thomson Holidays, the UK's largest tour operator, which was bought by German rival Preussag for £1.8bn.

C&N dismissed the report as speculation, but confirmed it was looking for an international purchase.

"We do want to be a group with international dimension," said spokeswoman Nina Dumbert.

C&N has also been reported to have been in talks with Airtours, another big UK operator.

First Choice could fetch as much as £1bn in the rapidly consolidating European holiday market.

C&N is believed to be keen to restore its position as the largest tour operator in Europe.

Airtours' plan to buy First Choice last year was blocked by competition concerns.

Mediterranean specialist

First Choice provides holidays to 29 destinations, mainly in the Mediterranean, for UK holiday makers.

It also operates its own airline, Air 2000.

The company lost £34m in the first six months of the year as it struggled to expand.

It has been expanding in Europe, buying Spain's Barcelo Group, and has also purchased Sunsail and Beyond Travel in the UK.

First Choice also recently announced a £200m alliance with the Royal Caribbean cruise line in order to market cruises to the European market.

Much of the UK tour operators market is now in foreign hands.

Thomas Cook, the other big UK operator, is likely to be sold to Carlson, which already owns part of the group, as part of the Preussag deal.