Travel-retail triumvirate emerges

Italian travel-retail and catering conglomerate Autogrill has announced a double deal that it claims makes it the “world’s leading provider in the airport retail market”. The company has won the bidding for BAA retail subsidiary World Duty Free and acquired the remaining 49.95% of Spanish retailer Aldeasa, for a combined consideration of over $1.5bn.

 

Autogrill, which acquired Alpha Airports Group in June last year and 50% of Aldeasa in mid-2005, has been granted a 12-year concession at BAA’s seven UK airports—including London Heathrow, Gatwick and Stansted airports—after paying £546.6m ($1.1bn) for the retailer. The deal is expected to be completed by April if European authorities consent.

 

Autogrill’s acquisition of the remaining Aldeasa stake, which it purchased from Imperial Tobacco for €275m ($422.6m), is expected to be completed by May. Imperial Tobacco sold the stake after acquiring Franco-Spanish tobacco company Altadis, which had bought Aldeasa jointly with Autogrill in 2005 and had made an agreement to offer the holding to the Italian company if it was acquired.

 

Both deals were financed by debt, as reported previously on DFNIonline, and Autogrill said that it now expected to make synergies of €40m ($) by 2011 through integrating World Duty Free, Aldeasa and Alpha. The total enterprise value of the deal is €1.07bn ($1.64bn).

 

Aldeasa made sales of about €830m ($1.28bn) through its 273 airport and museum stores in 2007; Alpha sales (including flight services and catering) from June to December 2007 were £399.5m ($807.1m); and World Duty Free’s sales in 2006 reached $770m.

 

While the trio combined might not make the biggest-selling duty-free operator—DFNIonline estimates sales are less than DFS Group’s—Autogrill’s claim that it is now the dominant player in global airport retail is correct. And with 330 travel-retail outlets covering the Americas, Europe, the Indian sub-continent and the Middle East, it is also one of the most geographically diverse.