Dufry buys major stake in World Duty Free
Print Edition
SWITZERLAND’S Dufry has agreed to buy a majority stake in World Duty Free in a deal which values the Italian firm at 3.6 billion euros (US$3.8 billion) and will make the combined group the world’s biggest travel retailer.
Edizione, the holding company owned by the Benetton family and controlling World Duty Free, said it was selling its 50.1 percent stake in the group to Dufry for 10.25 euros per share.
It said proceeds from the sale would total 1.3 billion euros, valuing the whole group at just under 3.6 billion euros after taking account of a 970-million-euro debt at the end of last year.
The deal is the second high-profile foreign takeover of an Italian company in less than a week after China National Chemical Corp agreed to buy a majority stake in tire maker Pirelli.
The Benetton family had indicated it was willing to give up control of WDF to help the company cope with the rising costs of airport concessions, and also give the retailer more bargaining power with suppliers.
Dufry in turn cements its position as the world’s leading travel retailer in a fragmented sector — the combined group will have a market share of 25 percent and projected annual sales of US$9 billion. One analyst who asked not to be named put the value of expected synergies from the merger at between 80 million and 120 million euros a year.
Total retail spending at airports around the world is expected to hit US$59 billion in 2019 from US$36.8 billion in 2014, analysts predict, driven by rapid growth in Asia, where more than 350 new airports are set to be built in the next eight years.
The price per share offered for World Duty Free represents a 22 percent premium to the average market price in the last six months, but is below the 11 euros per share which some analysts had expected.
Edizione said Dufry, which last year bought Nuance Group for US$1.7 billion, would make a mandatory offer for the rest of WDF and would launch a share offer to help finance the acquisition.
The Benetton family spun WDF out of airport and roadside service station food and drinks retailer Autogrill in 2013.
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