LONDON, U.K. and TORONTO — Europe’s largest travel-services company, Germany-based TUI AG, is selling its Hotelbeds online reservations unit to Cinven Ltd. and the Canada Pension Plan Investment Board for $1.3 billion (U.S.).
Hotelbeds works in partnership with more than 72,000 hotels worldwide and offers rooms to both online and traditional travel agencies.
TUI plans to use the sale’s funds to raise its credit rating, while it simultaneously acquires new assets such as tour operators, hotels and cruise ships. It plans to invest in information technology as well.
TUI CEO Fritz Joussen told Bloomberg News that the company plans to step back from online activities and focus more on its hotels and ships tour business instead. He said its goal is at least a 10 per cent underlying operating-profit growth over the next three years.
While the fine print of the deal is currently being worked out, TUI expects the deal to be completed by September. TUI currently operates 320 hotels worldwide, with plans to open and acquire another 60.