Jetset Travelworld Ltd has announced plans to merge with Stella Travel Services Holdings as respective boards of the two travel companies have agreed on a conditional merger deal with Qantas Airways, Jetset's majority shareholder, giving its thumbs up for the planned merger.

The proposed corporate marriage will be subject to approval of Jetset shareholder, which are set to convene in an August meet to discuss the proposal, and will require the nod of both the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC), the nation's two corporate regulators.

Jetset chairman Tom Dery said that an independent industry expert will be tapped too in order to appraise the proposal, as he hailed the proposal as "a unique opportunity to integrate two complementary travel businesses, adding scale to the combined company in the highly competitive Australasian travel services market."

According to the proposal and once it has gained approval, Stella shareholders will acquire about 219.5 million Jetset shares which comprise half of the capital of the merged entity.

The merged company would retain the label Jetset on the exchange and would enter the market with a capitalisation of $439.2 million, basing on the latest closing price of Jetset shares, which is currently in a trading halt with a value of $1.00 per share.

Stella chairman Andrew Cummins is confident that both companies' clients will emerge as the real winner from the merger plans as they will enjoy more competitive products and services set to be offered by the merged entity.

He added that both Jetset and Stella came out stronger through the recent years and "this transaction creates an opportunity to build a business of genuine scale, providing long-term benefits and stability for the merged entity's franchisees and members, staff, suppliers and other trading partners."

The merged entity would give birth to a Jetset board with nine directors, three of which would be appointed by Stella with current Stella chief executive Peter Lacaze assuming the same role in the new entity.

Stella chief financial officer would likewise retain the same role in the merged company while Jetset chief executive Peter Collins is set to depart once the merger plan is accomplished and subsequently return to Qantas.