Thomas Cook merger gets all clear

The three-way tie up, which also involves the Midlands Co-op, will create the UK’s largest high street travel agent and second largest foreign exchange group with over 1,200 shops.

Confirming its provisional findings from last month, the Competition Commission ruled that even with the firm’s strong position customers were unlikely to pay more or have less choice as a result of the merger.

Thomas Cook needs some good news after three profits warnings in the past year forced the resignation of chief executive Manny Fontenla-Novoa a fortnight ago.

The company will own 70 per cent of the new group and has promised savings of around £35m a year from the merger, which is part of a plan to boost the competitiveness of the UK business.

Out of a total of 1,240 shops, it has 780, while 360 are currently run by the Co-op with the Midlands Co-op owning a further 100. The merger, which is expected to be completed by the end of September, is likely to lead to job losses and store closures.

Problems in the UK have been one of the reasons behind Cook’s disastrous last 12 months, a year that has seen its share price slump by 70 per cent.

A strategic review of its UK business is underway as it looks at the mix of holidays it offers and the utilisation of its airline fleet.

Its latest profits warning in July warned profits would be some £60m below expectations, which it also blamed on turmoil in the Middle East and North Africa, rising fuel prices and the squeeze in UK consumer spending.

It has also put £200m worth of assets up for sale to help cut its £900m borrowings.