TUI to Sell Hotelbeds for $1.3 Billion to Finance Expansion
- Proceeds to be used to cut debt, fund new hotels, cruise ships
- Buyers pay 1.2 times revenue for travel-industry booking unit
TUI AG agreed to sell its Hotelbeds online-reservations unit to funds of buyout firm Cinven Ltd. and the Canada Pension Plan Investment Board for 1.19 billion euros ($1.3 billion) as Europe’s largest travel services company seeks resources to reduce debt and fund expansion.
TUI will use proceeds from the disposal to raise its credit rating by “a few notches,” acquire assets such as tour operators, hotels and cruise ships, and invest in information technology, Chief Executive Officer Fritz Joussen said in a phone interview Thursday. The deal is targeted for completion by the end of September, the Hanover, Germany-based company said in a statement. TUI said a week ago that it was in talks with Transat AT about possibly acquiring the Canadian competitor’s French tour-operating arm.