HOLIDAY industry analysts were today predicting a price war, with summer bargains on offer for British travellers, after a £1 billion deal which created the UK's biggest tour operator.

Rossendale-based Airtours announced that it had seized control of First Choice Holidays, taking over the number one slot as largest holiday operator from long-standing leader Thomson Holidays.

In a bitterly-fought takeover battle, Airtours had succeeded in buying 49% of shares in First Choice, and last night announced that shareholders owning a further 2% had agreed in principle to accept the deal, giving the raiders a majority of shareholders in favour.

The Airtours bid for First Choice trumped a rival offer for the group from Swiss Travel Company Kuoni Reisen.

The deal is subject to approval by European competition watchdogs.

David Crossland, chairman of Airtours, said: "We are delighted that shareholders who, together with Airtours, control more than half of First Choice's ordinary shares support our offer.

"We remain confident of regulatory clearance from the European Commission. We urge the First Choice board to follow the wishes of its shareholders."

Earlier this month, Thomson had reaffirmed its intention to stay number one.

Thomson chief executive Paul Brett said: "We have been the leader for 25 years and we do not intend to relinquish that position."

A spokesman for Thomson last night refused to comment on the First Choice deal.

The combined Airtours/First Choice business will carry around 14 million passengers a year, run 26 hotels and 11 cruise ships and employ 25,000 people.

Airtours also owns the 1,200-strong Going Places travel agency chain as well as Direct Holidays and the Premiair airline.

First Choice owns Sovereign, Globesavers and the Unijet holiday business as well as Airline 2000 and the Suncar hire operation.

Taking over at First Choice will mark the completion of a long-standing ambition for Mr Crossland. Airtours' first bid for First Choice was knocked back six years ago.

The Airtours takeover bid, which values First Choice at 220 pence a share, will allow the merged business to save at least £35 million a year.

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