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TUI AG completes merger with TUI Travel PLC with the assistance of Allen & Overy

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18 December 2014

TUI AG has merged with its British subsidiary TUI Travel PLC to form the world's largest integrated tourism group.

After the shareholders of the two companies had approved the necessary resolutions by large majorities in October, the merger has now been completed by way of a contribution in kind of all outstanding shares in TUI Travel PLC into TUI AG. The implementation of the capital increase resolutions was registered in the competent commercial registers of Berlin-Charlottenburg and Hanover on 11 December 2014, as planned. As a result, the transaction was completed within less than five months after the announcement of the proposed merger and less than six weeks after approval by the shareholders' meetings.

TUI Travel PLC has thus become a wholly-owned subsidiary of TUI AG, and the former shareholders of TUI Travel PLC now hold stakes in TUI AG in accordance with the agreed exchange ratio. TUI AG's shares have been listed in the premium segment of the London Stock Exchange since 17 December 2014, as planned, after both the Federal Financial Supervisory Authority (BaFin) and the UK Listing Authority (UKLA) approved the securities prospectus. 

On the basis of the exchange ratio agreed and the relevant market price of the shares, TUI AG's enterprise value post completion is approximately EUR 7.7 billion.
The merger is financed by way of EUR 300 million high yield issue, a EUR 600 million bridge financing and a EUR 1.75 billion revolving credit facility.

The merger has broken new ground in many respects. The requirements of German corporate and capital markets law had to be aligned with the corresponding provisions of English law:

  • First all-share-nil-premium merger between a large German listed stock corporation and a UK company;
  • Combination of a mandatory exclusion of UK shareholders under a UK scheme of arrangement with a capital increase against contributions in kind under German stock corporation law;
  • First listing of a stock corporation based in Germany in the premium segment of the London Stock Exchange and inclusion in the FTSE UK Index;
  • Approval of the securities prospectus both by the BaFin and the UKLA (passporting);
  • Simultaneous application of German and UK corporate governance principles and listing rules to a German stock corporation.

The Allen & Overy Corporate team was led by corporate partners Helge Schäfer (Hamburg) and Stephen Mathews (London) and comprised corporate partners Richard Hough and Richard Evans (both London) with support from corporate counsel Jens Wagner (Munich), corporate senior associates Matthew Appleton (London) and Jonas Wittgens (Hamburg) as well as corporate associates Karishma Naravane, Katerina Engelbrecht, Tom Jokelson and trainee Olivia Ferdi (all London).

The Allen & Overy capital markets team was led by partner Oliver Seiler and comprised counsel Knut Sauer as well as associates Patrick Miltner and Martin Rojahn (all Frankfurt). UK ECM advice was provided by senior associate Michael Bloch (London).

The Allen & Overy tax team was led by Gottfried Breuninger (Munich) and Lydia Challen (London) supported by senior associate Magnus Mueller (Munich) and associate Daniella Abel (London).

The Allen & Overy financing team was led by Cathy Bell-Walker supported by senior associate Vanessa Xu (both Banking, London). German finance law was provided by Thomas Neubaum, supported by associates Patrick Reuter and Rebecca Rolf (all Banking, Frankfurt). The High Yield Bond work stream was led by Jeanette Cruz (ICM, London).
Pensions partner Dana Burstow, senior associate Andy Cork and associate Joan Whybray (all London) advised on issues arising from TUI Travel’s pension schemes.

Incentives partner Paul McCarthy and senior associate Louise Batty (both London) advised on issues arising from TUI Travel’s incentives schemes.

Inhouse advice was provided by Hilka Schneider (General Counsel & Chief Compliance Officer and member of the Executive Board) and Marcus Beger (Group Legal Affairs).