Airport duty free operator sells for €1.27 billion

Dufry AG has agreed to buy duty-free store operator Nuance Group for 1.55 billion Swiss francs ($1.73 billion), its biggest acquisition ever in an expansion in the Mediterranean, the largest travel destination.

The Nuance Group operates Malta International Airport's duty free outlets, and its Malta subsidiary is run by the Bianchi group of companies. The purchase will boost cash earnings per share next year, said the Basel, Switzerland-based Dufry in a statement.

Nuance had sales of 2.1 billion francs last year and adjusted earnings before interest, taxes, depreciation and amortization of about 156 million francs.

The acquisition is a “transformational deal not only for Dufry but also for the travel-retail industry,” Chief Executive Officer Julian Diaz said in the statement.

The two businesses had a combined market share of 15 percent in airport travel retail last year, Dufry said. The Swiss company will finance 1 billion francs of the purchase with shares and the remainder with debt.

The acquisition will confirm Dufry as the leader in the global duty free and travel retail market, covering all continents. Dufry will emerge with a leading position in the Mediterranean in addition to its existing leadership positions in Latin America, Caribbean and North America.

In the Mediterranean, the largest and most important tourist destination in the world, Nuance's operations in Turkey, Malta and Portugal complement Dufry's existing operations in the region, where Dufry has activities in eight countries, such as Italy, Greece, Spain, Morocco and Egypt.

In Eastern Europe, Dufry will have a strong market presence in Russia, and add activities in Bulgaria. In North Western Europe, Dufry will become the preeminent travel retailer in Switzerland and have activities in Sweden as well as the UK, most notably at London Heathrow Airport.

Dufry will integrate Nuance into its organisation and expects to generate cost synergies starting in 2015.

Nuance is the world's 6th largest duty free and travel retail group by sales volume operating close to 75,000 square metres of retail space across 66 store locations in 19 countries globally. Nuance operates more than 350 duty free and tax free stores, brand boutiques and concept stores.