Germany’s TUI AG not to merge with UK unit

Germany’s TUI AG not to merge with UK unitGerman tourism group, TUI AG has said that it has ruled out a plan recommending the company's merger with TUI Travel subsidiary located in the UK.

TUI said that it is not planning to make a merger offer to the UK-listed company, ruling out the possibility of the merger aimed at saving costs. TUI Travel is the largest tour operator in Europe and was established following the merger of First Choice Holidays and the travel unit of TUI in 2007.

"This decision is based on the assessment that a share-based transaction at current exchange ratios is not in the interest of TUI shareholders. Irrespective of this, TUI AG will continue fully to exercise its role as majority shareholder in order to leverage the value potential and benefits within the TUI Group for the benefit of all shareholders and other stakeholders of TUI AG," TUI said in a statement.

TUI now owns more than half of the company and it was advised to merge with the company but the plan was not finalized. TUI Travel is believed to have raised questions over the location of the headquarters of the proposed merged entity and where it would be listed.