Autogrill buys two duty-free retail firms for EUR 1b

Italian foodservice operator Autogrill said on Monday it has sealed two retail deals in Spain and the UK for a total of EUR 1 bn. The food and catering group has raised its stake in Spanish-based airport duty free retailer Aldeasa to 99.90% from 49.95%. The Milan-based group has also acquired a 100% stake in World Duty Free Europe (WDF) from UK airport operator BAA.

The Aldeasa stake was bought for EUR 275 mln from Altadis, a subsidiary of the Imperial Tobacco Group. Autogrill acquired a first 49.95% stake in Aldeasa in 2005. The Spanish duty-free retailer generated sales of around EUR 830 mln last year, and has more than 250 stores in airports in 14 countries in Europe, Latin America, Africa, the Middle East and the US.

BAA, which is controlled by the Spanish construction group Ferrovial, said it was selling WDF as part of its ongoing non-core asset disposal programme. WDF has 65 shops and annual sales of around £300 mln. The company will now enter into a 12-year concession agreement for the operation of duty free stores at BAA's seven UK airports.

Ferrovial has sold the assets to help reduce the EUR 34 bn in debt it incurred when it purchased the British airport operator in August 2006. The group has already divested several assets including a 21% stake in Sydney airport for EUR 475 mln, and BAA's controlling stake in Budapest airport for another EUR 173 mln.

Autogrill said it expects the integration of Aldeasa, World Duty Free and the Alpha Group, bought in 2007, to generate about EUR 40 mln in synergies by 2011. Financing is being provided by BNP Paribas, Intesa Sanpaolo, Royal Bank of Scotland and UniCredit.

With over EUR 4.8 bn of sales in 2007, Autogrill Group is active in 42 countries and has around 70,000 employees. It operates over 5,200 shops in over 1,100 locations, serving 890 million customers a year. Listed on the Milan stock exchange since 1997, Autogrill is controlled by Edizione Holding, the financial holding of the Benetton family. Autogrill's market capitalisation is approximately EUR 2.63 bn.