Photo/Du Wei (NBD)

Aug. 29 (NBD) – Debt-laden U.K. travel giant Thomas Cook Group Plc confirmed on Wednesday that Chinese conglomerate Fosun's tourism unit will provide 450 million pounds (547.2 million U.S. dollars) for a controlling 75-percent stake of the U.K. firm's tour-operating arm and a 25-percent stake in its airline business.

Stock price of Fosun Tourism (01992.HK) closed at 8.95 Hong Kong dollars (1.1 U.S. dollars) per share on Wednesday, up 5.29 percent, but tumbled by 2.01 percent on Thursday to 8.77 Hong Kong dollars per share.

The deal is expected to be completed at the beginning of October 2019, but is subject to legally-binding agreement reached by the parties, revealed Thomas Cook's announcement.

With regard to the investment in Thomas Cook, Jim Qian, chairman of Fosun Toursim, and Wang Qunbin, chief executive officer of Fosun Group, both showed strong confidence. Qian commented in a media interview that the U.K. company boasts a large amount of holiday hotels, which could create remarkable synergy effects together with those handed by the Chinese company.

National Business Daily (NBD) noticed the transaction marks Fosun Tourism's second acquisition of tourism asset in Europe. As early as 2015, the Chinese company purchased the iconic French resort company Club Med and accelerated its expansion in the Chinese market. Currently, the resort business with Club Med playing the vital role is the largest contributor to Fosun Tourism's total revenue.

According to the interim report of 2019 released on August 19 by Fosun Tourism, revenue from the resort business made up 59.4 percent of the company's total. In the period ended June 30 of 2019, the company has turned profitable, with revenue and profit attributable to equity holders of the company reaching record high, up 35.9 percent and 292.5 percent year on year respectively. 

Apart from Fosun Tourism, a flurry of Chinese companies are eyeing the European tourism market, NBD noticed.

In 2015, China's tourism company Jin Jiang International Holdings Co Ltd bought French hotel chain Groupe du Louvre. In 2016, Chinese online travel giant Ctrip acquired Skyscanner, a Scotland-based flight-search company, for 1.4 billion pounds. Moreover, Alibaba also started in the same year to make deployment in Germany by partnering with local companies to enable Chinese tourists to pay via the Chinese tech giant's payment arm Alipay.

Email: lansuying@nbd.com.cn