TUI is seeking to have its merger with British Group First Choice approved as soon as possible.

The commission had expressed concerns over the proposed merger because of the competition issues it would create in the Irish market, as First Choice own Falcon/JWT which is Ireland's second largest travel agent.

In the proposal, seen by the Sunday Tribune, TUI is offering to "remedy any unresolved competition concerns" arising from the merger in Ireland.

Included in this are commitments that "involve the divestment of its entire travel/tourism business in Ireland, carried on by Budget Travel" while they propose to "find a purchaser and to enter into a final binding sale and purchase agreement" for their Irish business.

Margins in the package holiday business have been narrowing for some time with competition from online holiday sellers and low-cost airlines. However TUI are said to be confident they could sell the company quickly to a private equity firm.

"Selling it would not be an issue if we had to. We would anticipate interest from hedge fund and private equity companies, " said one TUI source.

Early speculation from analysts was that TUI and First Choice would offer to sell the smaller of the merged parties' businesses, Falcon JWT.

However the Sunday Tribune understands that Budget is more of a stand-alone legal entity then Falcon and would therefore be easier to sell despite having a lesser market share.

TUI flagged the fact that they were willing to sell the larger of the business in their proposals to the European Commission saying it "goes even further than reversing the status quo ante".

"It involves the sale of the bigger of the two Irish travel businesses of the merging parties and represents a sale of the business which is best equipped to compete effectively in Ireland under ownership independent of the merged firm, " it read.

Budget also owns its 32 'Bricks and Mortar' retail units compared to Falcon JWT's 20 units making it more attractive to potential bidders as a property play.

TUI also included "strong and experienced management" as part of the reason why Budget Travel could be sold in the short term.

Their most recent turnover of 144m was only 3% of its turnover for Northern Europe whereas the proposed merger with First Choice is worth an approximate 1bn to TUI.

"The Irish market is not very significant for TUI and it makes no sense for this to hold up the merger, " said the TUI source.

The documents also show that Budget made a loss in 2006 as a result of increasing competitive pressure from low-cost carriers but says it is on course to return to profitability in 2007.

Industry sources have estimated the value of Budget Travel at between 40m and 50m with the European Commission announcing their decision on the merger by midnight tomorrow.