THE parent firm of Falcon Holidays has agreed to merge with its German parent company to create the world's largest tour operator, valued at £5.2 billion. TUI Travel, which also owns Thomson and First Choice, will merge with Germany's TUI AG in a nil-premium all-share merger, after the firms first announced talks in June. The merger brings together TUI Travel, which serves 30 million customers, with TUI AG, which owns 230 hotels with more than 155,000 beds and seven cruise ships. The firms said the merger will allow the enlarged business to offer more holidays, add up to 30 more hotels and two cruise ships, and make savings of at least £36 million a year. A merger between the two groups has been mooted since 2007 when TUI Travel was created through the merger of Britain's First Choice holidays and the tourism business of TUI AG. The German parent currently owns just over half of TUI Travel. A merger attempt was made in early 2013 but the deal collapsed over price.