Joint Venture Simplifies BTI Ownership Consolidation
<B> Joint Venture Simplifies BTI Ownership Consolidation</B>
By Amon Cohen
Business Travel International has taken a crucial step in the consolidation of its ownership structure by simplifying it to a joint venture between just three companies--a number it further expects to reduce to two by the end of the year. The reconstitution of the BTI organization finally gives it a level of global network control similar to worldwide rivals American Express and Carlson Wagonlit Travel.
Under the new agreement signed on June 30, BCD Holdings (parent company of WorldTravel Partners-BTI Americas) and Hogg Robinson of the United Kingdom each take a 46 percent stake in BTI. The remaining 8 percent is held by Swiss travel company Kuoni, which owns BTI Central Europe. But it is believed that Kuoni will sell its shareholding to the other two if its strategy for expansion in the European leisure market comes to fruition. (It currently is attempting to tie up an alliance with major U.K. tour operator First Choice).
That would leave ownership of BTI in the hands of just two companies--the same as Carlson Wagonlit, which is jointly owned by Carlson Companies of the United States and Accor of France.
As part of the new structure, BCD and Hogg Robinson have created a four-strong shareholders' board, with chairmanship rotating between the two companies every two years. Chairman for the first term is BCD chairman John Fentener van Vlissingen. Although WTP-BTI Americas has the third-largest agency in the United States, its parent company BCD is owned by the van Vlissingen family, reputedly the wealthiest in the Netherlands.
Also on the board is David Radcliffe, CEO of both Hogg Robinson and BTI. Hogg Robinson remains the managing partner of BTI, with responsibility for day-to-day operations.
BTI originally was owned by more than half a dozen shareholders. As each of them left the partnership, they put their shares into a trust fund managed by Hogg Robinson. That fund now has been reconstituted as a joint venture company, almost completing six years of efforts by Hogg Robinson to transform BTI from a disjointed consortium into a global, branded organization.
"The joint venture agreement is the last major piece in the jigsaw," Radcliffe said. While it does "answer our critics," who said that ownership was too loose to deliver a controlled, consistent global service, "frankly, we never were a fragmented organization. The criticism came from our rivals, not from our customers, who have always understood how we work."
Radcliffe said now there will be more cooperation between BCD and Hogg Robinson, including new geographical joint ventures and further technological collaboration.
As well as the possibility of getting their hands on BTI Central Europe, BCD and Hogg Robinson also intend to buy up more member agencies of the BTI network. However, these will be limited in scale, since between them they already own all the key markets. BCD owns BTI members in Belgium, the Netherlands, Portugal and the United States, while Hogg Robinson's dominion stretches beyond the United Kingdom to Australia, Canada, Denmark, Finland, France, Italy, Norway, Russia and Sweden. Kuoni has ownership in Austria, Germany, Hungary, Liechtenstein and Switzerland.
Meanwhile, Hogg Robinson announced its financial results for the first quarter of 1999. Operating profits for its business travel interests rose 10.2 percent to $33 million and new acquisitions (including Rider Travel of Canada) produced a net contribution of $4.2 million. Hogg claims that its U.K. volume now is outstripping American Express for the first time since Amex merged with Thomas Cook in 1994. Amex hotly denied the assertion.