June 27, 2014 / 1:25 PM / 3 years ago

RPT-TUI Travel and TUI AG agree to merge

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LONDON, June 27 (Reuters) - Europe's biggest tour operator TUI Travel and majority owner TUI AG plan to merge in an all-share, nil-premium deal, the two companies said on Friday, following months of speculation.

TUI Travel, which is around 55 percent owned by the German travel and tourism group TUI AG, said a deal would result in potential cost savings of at least 45 million euros ($61 million) per year.

Under the plan, TUI Travel shareholders would receive 0.399 new TUI AG shares. Alexey Mordashov, the largest shareholder in TUI AG, has indicated his support for the deal.

Shares in TUI Travel were up 4.8 percent, while shares in AG were up 4.5 percent. ($1 = 0.7359 Euros) (Reporting by Kate Holton; Editing by Pravin Char)

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