BRUSSELS, Belgium: German department store operator KarstadtQuelle AG on Friday won EU permission to combine its Thomas Cook travel unit with Britain's MyTravel Group PLC, forming the second largest holiday business in Europe.
EU regulators said their investigation found that the Internet has shaken up the travel business and allowed new channels for independent tour operators to reach customers, meaning that there are fewer antitrust concerns for combining major 'high street' travel agencies.
The deal combining Thomas Cook and My Travel would not harm consumers in Britain and Ireland "who would continue to have access to package tours at competitive prices," they said.
They must also rule by May 16 on another big travel transaction — TUI AG's bid for First Choice Holidays PLC — as First Choice warned Friday that it may have to sell one of their Irish businesses to eliminate EU worries that the deal could allow it too much control over the holiday market.
The European package holiday sector has come under increasing pressure from trends such as a switch to low-cost airlines and consumers creating their own travel packages over the Internet.
That sparked two honeymoon voyages this spring as TUI, Europe's largest tour operator by revenue, said in March it was taking over First Choice, only a month after Karstadt's Thomas Cook said it would join with MyTravel. TUI trades in Britain under the name Thomson.
Karstadt will control a 52 percent stake in the new company, Thomas Cook Group PLC, keeping the name of one of the oldest established brands in the travel industry. The remaining 48 percent will be held by MyTravel shareholders.
The European Commission said that deal joined businesses that were direct rivals supplying short-haul and long-haul package holidays in Britain and Ireland but their increased market share would not allow them raise prices as they would face competition from TUI, First Choice and a large number of small package holiday operators.
It also took a wider look at the travel industry but found that the deal would not up the risk of major British and Irish tour operators co-ordinating prices or capacity because the Internet has revolutionized the market.
"The increased use of the Internet and of online-distribution have opened up a direct route to market for smaller suppliers of package holidays and also allow travel agents and consumers to combine different travel components themselves," it said.
People have more choice to pick and choose their journeys and, thanks to low-cost airlines, have many new destinations to head for, encouraging more independent travel, it said.
The new business would not block access to airline seats and accommodation places for rivals because it did not have enough control of the wholesale market to seriously damage smaller retail operators, the Commission found.
Regulators in March cleared Karstadt to take sole control of Thomas Cook when it bought out the 50 percent it did not own from airline Lufthansa AG for €800 million (US$1.05 billion).
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