 TUI is optimistic about the outlook for both shipping and tourism |
Shares in German travel-to-shipping company TUI fell about 2% on Monday after it agreed to buy CP Ships of Canada for $2bn (�1.1bn; 1.7bn euros). Already Europe's biggest travel firm, TUI is looking to increase the size of its container shipping operations.
The company said the acquisition would turn its Hapag-LLoyd business into one of the world's five biggest shippers.
TUI said it would sell shares worth 1bn euros (�677m; $1.1bn) to existing shareholders to finance the cash deal.
'Compelling opportunity'
The bid values CP Ships' shares at $21.50 each, 10% more than Friday's closing share price.
Once they have merged, the two firms will have a fleet of 139 ships, with another 17 already ordered.
They also will have a stronger presence in the North Atlantic, Asia Pacific and South America.
"Our enlarged shipping business will be well positioned to take advantage of the strong long-term growth dynamics in the container shipping industry," TUI's chief executive Michael Frenzel said in a statement.
"This is both a compelling financial and strategic opportunity for us."
The company said that it expects to see growth in both its tourism and shipping businesses.
TUI tweaked its strategy regarding Hapag-Lloyd last year and cancelled plans to sell as much as 49.9% of the company to investors citing weak market conditions.
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