Milan: Switzerland’s Dufry has agreed to buy a majority stake in World Duty Free in a deal which values the Italian firm at €3.6 billion (Dh14.4 billion, $3.8 billion) and will make the combined group the world’s biggest travel retailer.

Edizione, the holding company owned by the Benetton family and controlling World Duty Free (WDF), said on Saturday it was selling its 50.1 per cent stake in the group to Dufry for €10.25 per share.

It said proceeds from the sale would total €1.3 billion, valuing the whole group at just under €3.6 billion after taking account of debt, which stood at €970 million at the end of last year.

The deal is the second high-profile foreign takeover of an Italian company in less than a week after China National Chemical Corp agreed to buy a majority stake in tyre maker Pirelli last Sunday.

The Benetton family had indicated that it was willing to give up control of WDF to help the company cope with the rising costs of airport concessions, and also give the retailer more bargaining power with suppliers.

Dufry in turn cements its position as the world’s leading travel retailer in a fragmented sector — the combined group will have a market share of 25 per cent and projected annual sales of $9 billion. One analyst who asked not to be named put the value of expected synergies from the merger at between €80 million and €120 million a year.

Total retail spending at airports around the world is expected to almost double to $59 billion in 2019 from $36.8 billion in 2014, analysts predict, driven by rapid growth in Asia, where more than 350 new airports are set to be built in the next eight years.

Share price

The price per share offered for World Duty Free represents a 22 per cent premium to the average market price in the last six months, but is below the 11 euros per share which some analysts had expected.

Shares in World Duty Free — which operates 495 stores in 98 airports including London’s Heathrow and Gatwick — closed at €10.96 on Friday.

Edizione said Dufry, which last year bought Nuance Group for $1.7 billion, would make a mandatory offer for the rest of World Duty Free and would launch a share offer to help finance the acquisition.

It said a group of shareholders representing approximately 30 per cent of Dufry’s voting share capital had given the Italian group “irrevocable undertakings” to vote in favour of the capital increase. The closing of the sale is expected in the third quarter of 2015.