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. Last Updated: 07/27/2016

Thomas Cook Purchases Holiday Rival MyTravel

LONDON -- German-owned Thomas Cook is to buy British package holiday rival MyTravel, the companies said on Monday, creating a travel giant worth about £2.8 billion ($5.5 billion).

Thomas Cook, which is owned by stores group KarstadtQuelle, will hold 52 percent of the new entity, with the other 48 percent controlled by MyTravel's shareholders.

The new company will be called Thomas Cook Group and take about 19 million people a year on holiday.

MyTravel chief executive Peter McHugh said the deal would create a company with annual revenue of around £8 billion and close the gap on Europe's biggest travel operator TUI. The deal is to be completed by June.

The new firm, to be headquartered in London and listed on the London Stock Exchange, would be worth around £2.8 billion following a sharp jump in MyTravel shares Monday.

The package-holiday industry has seen a decline as growing numbers of holidaymakers plan their own trips using the Internet and low-cost airlines.Companies are attempting to counter this scaling up their businesses to make savings, as well as branching into growing leisure markets such as cruises.

MyTravel and Thomas Cook said they expected to make cost savings of £75 million ($146.1 million) per year from combining the two businesses although it would take at least two years for the cost savings to come through.

MyTravel has a total of 12,947 staff, and Thomas Cook 19,775.

McHugh said the bulk of any job losses would be in Britain. "There certainly will be some job cuts but its premature to say how many," he said.