A&O and Herbies advise as Tui merges with Tui

Allen & Overy and Herbert Smith Freehills (HSF) are advising German-headquartered travel group Tui AG and its UK subsidiary Tui Travel respectively on their £4.8bn merger.

The all-share acquisition sees Tui AG acquire the outstanding 45.5 per cent of Tui Travel it does not already own.

Allen & Overy’s team is led by Hamburg corporate partner Helge Schaefer and London corporate partner Stephen Mathews, alongside fellow partners Richard Evans, Richard Hough and Oliver Seiler, supported by senior associates Matthew Appleton and Jonas Wittgens. 

HSF London partners David Paterson and Roddy Martin, alongside Berlin-based Ralf Thaeter, are acting for Tui Travel alongside associates Hans-George Schulze,  Gareth Sykes, Annemarie Lietmeyer and Martin Weatherston-Wilson from London, Frankfurt and Berlin.

In a statement announcing the merger on Friday (27 June) the companies said the deal would result in cost savings of around £36m a year, and would simplify the current group structure. The merger would be achieved through a nil-premium merger by way of a UK scheme of arrangement, in which Tui AG will issue new shares to Tui Travel shareholders. The enlarged share capital of Tui AG would be listed on the London Stock Exchange with a quotation on a German stock exchange.

Tui Travel is already in the FTSE 100, having listed in 2007.

Background to the deal:

Tui Travel was created in 2007 when Tui AG merged with First Choice Holidays. Legacy Herbert Smith and A&O also took the lead roles on that merger, advising First Choice and Tui respectively (19 March 2007). Herbert Smith’s David Paterson, who is leading the current transaction, was First Choice’s relationship partner at the firm. Both firms have since retained their positions as the go-to corporate advisers for the companies.

Legacy Herbert Smith and HSF has acted on a range of major transactions for Tui Travel, including its strategic combination between Air Berlin and TUIfly, including the transfer of TUIfly’s low cost carrier business to Air Berlin, as well as its pensions revamp three years ago (13 June 2011).

Meanwhile A&O has advised Tui AG on a range of financing issues, among other deals. The firm picked up its first mandate from the company in 2003, when it advised on a loan financing (24 March 2003).

Both Tui Travel and its German parent have rejigged their internal legal teams recently. At Tui Travel, tour operating general counsel Mike Bowers was named group general counsel after incumbent Andrew Johns was appointed as director, secretariat, health & safety and risk (25 November 2013). Meanwhile former Clifford Chance lawyer Hilka Schneider was appointed as Tui AG general counsel earlier this year (23 January 2014), joining from engineering company Terex.