Holiday company First Choice - which owns Falcon Holidays and JWT in Ireland - is to merge with Swiss group Kuoni to create a £1.45 billion European travel group.

The new company will be called Kuoni Holdings and will be the second largest tour operator in Europe with more than seven million customers a year in 20 countries.

The merged group will be owned 53 per cent by Kuoni shareholders and 47 per cent by First Choice and will be listed on the London and Swiss stock exchanges.

Mr Ian Clubb, chairman of First Choice, takes over as chairman of the new group, with Mr Riccardo Gullotti of Kuoni, as chief executive. The group's headquarters will be at Crawley, in Britain, with an international division based in Zurich, Switzerland.

The two companies said that, as well as allowing expansion across Europe, the merger would give the enlarged group more clout when dealing with suppliers.

First Choice is one of the main tour operators in Britain, and is a market leader in the British long-haul charter flight market.

It owns the British charter airline, Air 2000 and British seat-brokers Viking Aviation.

Its Irish subsidiaries control around one-third of the market here.

The group unveiled profits last year which had tripled to £50 million sterling (€74 million) from £15.4 million.

The growth was due mainly to acquisitions, which included tour operator Unijet, long-haul travel specialists Hayes & Jarvis and Intatravel.

Kuoni, which today announced its sales for 1998 were up 25.6 per cent to £2.25 billion, specialises in up-market long haul holidays.