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Tui Group is buying luxury cruise ship MS Europa 2 for €278 million in cash and debt to bolster results at its Hapag-Lloyd cruise business.

The company, formed from the merger of German travel and tourism group Tui AG with London-listed Tui Travel, is trying to improve results at the loss-making Hapag-Lloyd cruise unit which it hopes will break even in the current 2014/15 business year.

The purchase from current owner, Swiss businessman Otto Mihm, was first reported by German daily Frankfurter Allgemeine Zeitung (FAZ), in an advance copy of an article to be published today (Friday).

The purchase price is formed of €67 million in cash and €211 million in debt, a spokesman confirmed to Reuters.

FAZ said the deal meant Tui would be able to save charter rates of around €27 million a year and would improve profit in the 2015/16 business year by around