Singapore’s sovereign wealth fund GIC and the city state’s government owned investment arm Temasek Holdings, along with Qatar Investment Authority, have each committed to buying up to 450 million Swiss francs ($468 million) worth of new shares in Swiss company Dufry AG as part of the later’s buyout of Italy’s World Duty Free SpA (WDF).
Dufry Monday said it plans to raise at least 2.1 billion euros of equity and as much as 1.5 billion euros of debt for the deal, implying that it values World Duty Free at 3.6 billion euros.
The takeover will see Dufry enter into a binding agreement with Edizione Srl, a company controlled by the Benetton family, to acquire its 50.1 per cent stake in World Duty Free SpA. Post the transaction, Dufry will make an offer for the rest of World Duty Free.
“The rights issue is fully secured by a combination of the underwriting by a bank consortium as well as commitments by the investors GIC the Qatar Investment Authority (“QIA”) and Temasek, which have all committed to invest up to CHF 450 million each in equity in the combined entity,” Dufry’s statement said.
Dufry said the transaction would create a series of new growth opportunities thanks to the broader breadth of the combined platform.
Listing out the rationale for the deal, the company said: “The combination with WDF will further enhance Dufry’s global position in the travel retail industry and the combined entity will be present in 67 countries and reach a market share of approx. 24 per cent in airport retail globally The transaction will enhance Dufry’s portfolio with attractive long-term concessions across several major European airports, including the recently extended London Heathrow airport with a large number of emerging market consumers and the Spanish airports which ideally complement Dufry’s strong Mediterranean footprint; in addition, the transaction will also strengthen Dufry’s operations in North and Latin America, Asia and the Middle East.”