Thomas Cook (India) will discontinue the Kuoni brand in India within a week of closing the acquisition of Swiss travel major Kuoni Group’s travel business in the country and in Hong Kong for Rs 535 crore.
Kuoni India will be rebranded SOTC India and will operate independently. The acquired company, with its brands SOTC, Sita and Distant Frontiers, will continue to engage in outbound and inbound tour business and add to Thomas Cook’s bottom line. As per the transaction, Thomas Cook (India) has the right to continue with the Kouni brand in India for one year and in Hong Kong for five years.
“The Kuoni brand in India will disappear in weeks. The company will be rebranded as SOTC India, which is a strong brand in India. Tour and related services will be offered under SOTC, Sita and Distant Frontiers brands. The process of change has been initiated,” Madhavan Menon, Managing Director, Thomas Cook (India) told The Hindu, adding Kuoni is not a very strong brand in India.
Though the brand identities of SOTC India and Thomas Cook (India) will remain separate, the back end will see integration to achieve synergistic benefits.
“Advertising will be separate, but media buying and brand building will be integrated. We will have a shared services platform. For example, airline purchases and invoices will be done by a single back end. We will be very careful in handling the acquisition because we are putting two serious competitors together,” Mr Menon said.
He said the acquisition will lead to incremental profit in 2016, and synergistic benefits will only be seen in 2017. “The integration of mindsets will take time and I am in no hurry,” Mr Menon added.
The combined Kuoni entity had a turnover of Rs 845 crore as compared to Thomas Cook (India)’s standalone turnover of Rs 502 crore as of December 2014. Kuoni had entered India in 1997.
The outbound tours including MICE of the combined entity was over 200,000 while inbound travel was above 235,000 in the period.
“With Kuoni’s network, we now have 82 branches and 190 franchise outlets. So far, the forex business was the main revenue earner for Thomas Cook (India), now forex and travel businesses will be equal,” he added.
The acquisition of Kuoni’s Hong Kong travel business has given an opportunity to the company to foray into the Asian market, Mr Menon said.
“We wanted to expand into Asia and the acquisition of Kuoni’s Hong Kong business presents that opportunity. With this acquisition, we will foray into China and Indonesia, both big markets,” he said.
Thomas Cook (India) is looking at acquisitions in Asia to grow its business but has nothing lined up at the moment. “We are looking at organic expansion in India and Sri Lanka. In the rest of Asia, it will be a mix of organic growth and acquisitions,” he added.
Kuoni India will
be rebranded
SOTC India and
will operate independently
