Capture growth and value through M&A and partnerships

With credit markets in turmoil and the economic challenges noted earlier, we have focused our strategy on smaller deals and partnerships to strengthen our position versus pursuing any large scale M&A activity.

In the UK we acquired 50.1% of Gold Medal, a leading provider of independent holidays, and its associated brands Netflights, a leading flight consolidator, and Pure Luxury, a high-end scheduled tour operator. We also acquired Med Hotels, a bed bank provider, which has natural synergies with our Hotels4U business. These two acquisitions position us very well in the UK independent market, and the flight consolidator and bed bank businesses are also being rolled out to the rest of the Group as part of our push into the online travel agency space.

Also in the UK we acquired Airtrack, a sports travel business primarily focussed on motorsports. This adds new products and capabilities to our already strong Thomas Cook Sports business. The Thomas Cook Sports business was further bolstered by our announcement that we will be partnering the London 2012 Olympic and Paralympic Games as one of their tier 2 sponsors, giving us exclusive access to tickets and the right to use the London 2012 brand in our marketing efforts.

In Continental Europe we acquired Wasteels, a French distribution business, increasing our distribution capabilities in that market.

Looking forward, we are making good progress in negotiations with travel businesses in both Russia and China, which are the most attractive of the emerging markets where we currently do not have a presence. By the very nature of these markets, such negotiations are time consuming; however, we are confident we will come to a conclusion in at least one of these markets by early 2010.