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Kuoni goes local, Thomas Cook goes global, in acquisition trilogy

Jyoti Koul - New Delhi

Thomas Cook India Ltd (TCIL) and Kuoni, two of India's leading tour operator behemoths have taken a precisely contrasting approach towards acquisitions, the former buying out three global firms while the latter taking three local ones. According to industry sources Kuoni's wholly owned inbound giant Sita, which is celebrating its centennial in May is buying Delhi-based companies Distant Frontiers and Swagatam Tours with a 2006-end target of one more.

Industry sources have revealed that Sita is planning an all-out purchase of both Swagatam and Distant Frontier within the next three months. ETW has also learnt that Sita has signed a non-disclosure agreement with these companies and therefore all the parties are tightlipped on the details. According to industry sources, Sita's sole objective to buy these companies is to gain a further strong hold in the inbound incentives and FIT segment. Distant Frontier is a leading incentive company and Swagatam has a niche in FIT business. The same sources have also informed that the `Swagatam deal' has been in the offing for last two years. The company has been in business for 20 years now and registered a growth of 20 per cent in the last fiscal and a turn over of Rs 50 crore. Meanwhile, Thomas Cook India which was recently bought by Dubai Financial LLC from Thomas Cook AG, is taking no time to settle down after the limbo. Its chairman Udayan Bose has already deemed India as the base for all future acquisitions of which the immediate three will all be global. With more than Rs 150 crore in reserves, the acquisitions are expected to be decisive in framing the company's immediate prospects in new markets like South America.

Thomas Cook has 20 per cent market share in India's inbound and 25 per cent of its outbound market. In terms of business travel, it currently commands a 20 per cent of overall volumes.

Only last year, international TQ3 bought its Indian franchisee E Travel India (ETI). TQ3 India managing director Ajay Bali, told ETW that more acquisitions were in the pipeline in India's hinterland to tap a largely latent and fragmented business travel market as exports out of India continue to boom. Berthold Trenkel, COO, Carlson Wagonlit, who has been visiting India thrice a year for the last two years, is also believed to be seeking a buyout of a local giant, to consolidate its position in the Indian market.

(With inputs from Bhisham Mansukhani-Mumbai)