Italy's Autogrill to Acquire World Duty Free

Autogrill has indulged in some duty free shopping.

LONDON — Autogrill has indulged in some duty free shopping. The Italian restaurant and retail company announced Monday it has agreed to acquire the World Duty Free Europe travel-retail operator and will increase its holding in Aldeasa, which operates stores in airports and museums, by 49.95 percent, giving it a 99.9 percent stake in that firm.

Autogrill claims the acquisitions will make it the world's largest travel-retail operator.

WDF is the retail division of the British Airport Authority, which was acquired by a consortium led by Spanish construction and transport services firm Ferrovial in 2006. Autogrill will buy the Aldeasa stake from Altadis.

Autogrill stated that the combined enterprise value of the acquisitions weighs in at 1.07 billion euros, or $1.64 billion at current exchange.

"Through these transactions, Autogrill becomes the world's leading provider in the fast-growing airport retail market," stated Gianmario Tondato da Ruos, Autogrill's chief executive officer. "WDF's strong platform in one of the world's leading airports and its retail operational excellence will allow the group to enhance its development plans and to create new value for our shareholders. At the same time, I am extremely pleased to continue to strengthen our collaboration with colleagues at Aldeasa."

Autogrill will purchase WDF, which reported 2007 net revenues of 420.5 million pounds, or $841.8 million at average exchange, for 715 million euros, or $1.1 billion at current exchange.

WDF, which has entered a new 12-year concession agreement with BAA, manages 58 stores in seven U.K. airports, including Heathrow, Europe's largest airport. Travel retailing has a strong tradition in the U.K., where average traffic growth has increased 5.4 percent annually between 2001 and 2006, according to Autogrill, which cited figures from U.K. Civil Aviation Authorities.

Autogrill will pay 275 million euros, or $422.1 million, for its fresh stake in Aldeasa, which posted revenues of 830.2 million euros, or $1.14 billion at average exchange, last year.

Tondato da Ruos said during a conference call Monday that, following the acquisitions, Autogrill will serve 500 million customers through its retail and food and beverage outlets in European airports annually.

"By creating the European leader, we will be able to have a new commercial approach — following customers from the origin to their destination, and developing European coordinating promotional activities, European coordinated assortments, European aligned concepts [and] loyalty schemes," he said.
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