Thomas Cook, Sterling Holiday to merge in USD 140 mn deal

Tour operator Thomas Cook (India) Ltd has said it will merge its operations with resort owner Sterling Holiday Resorts India Ltd in a deal valued at Rs 8.7 billion.

The deal will be structured in a multi-stage process in which 100 shares of Sterling will be swapped for 120 shares of Thomas Cook (India).

Thomas Cook, in a statement on Saturday, said it will first make a preferential allotment for 23.24 per cent of Sterling at about Rs 1.9 billion and will then purchase another 23.63 per cent of Sterling for Rs 2.7 billion.

This will be followed by a mandatory open offer for buying up to 26 per cent stake for Rs 2.3 billion. Thomas Cook will also have the option to buy an additional 7.2 per cent for Rs 630 million.

The merger, which is expected to close by the fourth quarter of 2014, will give Thomas Cook access to Sterling Resorts' 19 properties in 16 holiday destinations across India.

(Reuters)