Travel firm First Choice has said it is to merge with the holiday operations of German rival TUI.
The merged group will be known as TUI Travel and will be headquartered in the UK with more than 27 million customers across 20 markets.
Bosses from both companies are hopeful that the union will create the "world's most profitable travel groups", as well as anticipating annual pre-tax cost benefits of £100 million by the end of the decade.
Chaired by TUI chief executive officer Michael Frenzel and deputy chaired by First Choice chairman Mike Hodgkinson, TUI Travel is forecast to have revenues of £12.1 billion, while the German group is also offsetting net debt by €875 million (£598 million).
"The combination of First Choice's fast growing specialist businesses and our strong momentum in the mainstream sector creates a solid platform from which to accelerate growth opportunities," Mr Frenzel insisted.
Last month British-based MyTravel announced plans to merge with German-owned Thomas Cook and Mr Hodgkinson claims today's union reflects the "dynamic and rapidly changing travel market".
"This proposed merger provides us with a unique opportunity to leverage the strengths of both First Choice and TUI to create one of the world's leading travel groups," he said.
"In addition to the significant opportunity to enhance margins, we believe the combination of brand leadership and management expertise that this transaction creates will deliver sustainable, long-term growth for shareholders and a group that satisfies the rapidly changing travel needs of our customers."
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