By MARTIN MOODIE
The European Commission yesterday announced it had cleared the acquisition by Autogrill of 100% of World Duty Free Europe Ltd. from BAA Ltd. as compatible with EU antitrust law.
The commission said it had concluded that the transaction “would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.”
Under the terms of the agreement, the deal was set to close May 21, when World Duty Free will officially separate from BAA.
The acquisition of World Duty Free Europe, coming soon after the finalization of a 100% stake in Aldeasa, effectively creates a travel retail “supergroup” that also includes Alpha Group and HMSHost Corp. That group, including Autogrill’s off-airport businesses, is expected to achieve sales of 6B in 2008.
As reported March 10, BAA agreed to sell World Duty Free to Autogrill for £546.6M.
Most analysts and pundits had believed the World Duty Free acquisition would gain approval, although some felt the commission might take a close look at the U.K. where Alpha Group runs duty free at Manchester Airport and a number of other airports.
But the European Commission expressed its satisfaction with the agreement, noting: “The activities of Autogrill and WDF overlap in the provision of airport shops. The commission’s investigation showed that the merged entity, although it would become the leading player in airport travel retail, would continue to face a number of important competitive constraints, both in bidding for retail concessions at airports and in the operation of airport shops.
“There are several strong international players that actively participate in tenders for airport retail concessions as well as numerous smaller local and regional airport retailers. In addition, unlike Autogrill, WDF has not been an active bidder in tenders for airport retail concessions.
“Finally, the commission’s investigation confirmed that switching costs for airport operators were low, whilst the entry of numerous high street stores and brands in various airports across the EEA illustrates that the airport retailing market is competitive.”
