Germany's TUI AG unveiled a tie-up of its tourism unit with Britain's First Choice to boost its position as Europe's biggest travel firm in the face of new competition from merging rivals. The two firms said on Monday they planned to create TUI Travel Plc, a London-based tourism giant 51 percent-owned by TUI with about $23 billion of revenues.

TUI and First Choice said the combined business will be headquartered and listed in London, with 49 percent owned by First Choice shareholders. First Choice revenues were 2.72 billion pounds in the year to October 31, while TUI's TUI Travel had pro-forma sales of 9.37 billion pounds in 2006, they said.

The travel industry has had a torrid few years, with an oversupply of package holidays exacerbated by more people planning their own trips using budget airlines and the Internet.

First Choice Chief Executive Peter Long, who will take up that position at TUI Travel, said the changing face of the industry meant he was confident competition regulators would clear the tie up with TUI's tourist business.

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