TUI Travel Merger – What Effect Will It Have On TUI Travel Shares?

You may have known them by a prior name (such as Thomson), but today TUI Travel stands as one of the leading British travel groups on the London Stock Exchange. Formed as a result of the merger between TUI AG’s tourism division and First Choice Holidays PLC back 2007, the company has a project a mixed image since. They operate in 180 countries and claims to have over 30 million customers on their books. During June 2014 a full merger with TUI AG was proposed and it finally occurred in November 2014, but did it do anything to even keel of TUI travel shares?

Looking at things realistically, the merger that occurred had been on the cards for a long time. Those with TUI Travel shares really couldn’t have been oblivious to what was going on, with many excited about it, while others dreading it. Following the two companies joining forces in November 2014, the new TUI Travel was valued at £7 billion, bumping up to it into the FTSE 100 in the process. Even though a merger usually represents a gamble, in TUI travels case it just represented good business. After the company realigns itself and egos have been put aside, it is set to save the company almost €170 million by 2015. It is safe to say that such reports didn’t take too long to affect the price of TUI Travel shares.

Financially speaking the merger represents good business sense, which is something the stock market will always respond to. TUI Travel shares jumped on the news of the merger by almost 7%, a long overdue jump in many people’s eyes. It has led to the merger being dubbed “a gift from heaven” by Commerzbank’s Johannes Braun and I’m sure that those who own TUI Travel shares would agree.
The merger should also help TUI Travel build upon their current operations, with their airline sector more than likely to become subject to a lot of attention. As an owner of eight European airlines, they are one of the largest tourism groups in the EU. They charter flights worldwide throughout 60 airports in 9 European countries. But with the company currently going through such changes, many analysts believe that TUI Travel may want to make the step up to the global stage.

There is no doubt about it, in 2015 beyond TUI Travel is on the way up and could very well be a major mover. The merger has helped bump TUI Travel shares out of the “sell” column and into the “buy” column, as they have now achieved FTSE 100 status. Timing and execution are what has made such merger a success and its management simply can’t be faulted. The big question now is what will TUI Travel do with this new found run of luck, with many feeling that stepping up to a truly international level being the rightful next step. However, what is for sure is that TUI Travel shares have become a valuable asset and is a stock that is well worth looking out for.

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