Arcandor, the German retail giant which owns a majority-stake in Thomas Cook, has applied for bankruptcy after Angela Merkel refused to give state aid.
The group was denied a €437 million (£377 million)loan by the German Government yesterday, with Chancellor Merkel accusing its shareholders and backers of not presenting a sustainable plan that would protect taxpayers’ money.
Arcandor, which employs 50,000 people in Germany, had been targeted by Metro, the German retailer which owns Media Markt, the seller of electricals goods, and Makro, cash-and-carry chain. Metro opposed a government bailout in favour of forcing Arcandor into a merger.
The German Government had earlier turned down a request for €650 million in credit guarantees. A bailout would have been hindered by European Union state aid rules.