Fosun, China’s largest private sector conglomerate, has sold the Thomas Cook brand to eSky, a Poland-based online travel agency group, for up to $39.5 million. This deal does not include Thomas Cook’s China operations. Fosun had been a minority shareholder in Thomas Cook since 2015 and took over the brand in 2019 following its high-profile collapse due to heavy debt.
Thomas Cook, previously a full-service tour operator competing with TUI, has since relaunched as a digital-only brand focusing on affordable holiday packages. eSky, backed by private equity firm MCI Capital, sees this acquisition as an opportunity to enhance Thomas Cook’s hotel expertise with eSky’s flight sales focus. The current CEO, Alan French, brings extensive technology experience to the table and is staying on after the acquisition.
eSky’s goal with this acquisition is to expand its package holiday business in Western Europe. By combining Thomas Cook’s brand recognition with eSky’s flight sales capabilities, the company aims to offer vacation packages across their existing markets in Central and Eastern Europe and Latin America through their eSky and eDestinos brands. This move reflects a strategic shift towards diversification beyond flights into more profitable holiday packages.
Despite Thomas Cook’s past financial struggles, the brand has seen improvements, narrowing losses in 2023 and expecting profits this year. The acquisition by eSky is anticipated to enhance package sales by over €230 million in the upcoming year, with projected profits of approximately $23 million by 2023. However, eSky will face challenges in reviving Thomas Cook’s tarnished reputation following its 2019 insolvency and the rise of independent booking options in the travel industry.
Private equity firms are increasingly becoming prominent players in the travel sector, with MCI Capital focusing on consolidation opportunities in Central and Eastern Europe. The acquisition of Thomas Cook fits into this strategy, showcasing the value that private equity sees in traditional travel brands with established recognition, despite potential risks involved in cross-border deals. Fosun’s divestment of non-core assets, including Thomas Cook, suggests that more travel assets may become available for acquisition in the future.
Looking ahead, industry analysts are curious to see how eSky will integrate Thomas Cook’s brand equity with its own technology platform. The success of this integration will largely determine the outcome of the acquisition. The transaction also underscores the enduring value of legacy travel brands and indicates that private equity firms will likely continue to pursue opportunities to acquire recognized brands with brand equity that may have faded but still hold value in the travel market. With Fosun’s ownership of other major travel assets like Club Med, the travel industry could see more significant divestments and acquisitions in the near future.
