Shilla Duty Free buys DFASS stake

The Shilla Duty Free will acquire a 44 per cent stake in inflight duty free specialist The DFASS Group for US$105 million.

And it will hold an option to purchase a further 36 per cent of the equity in five years.

The Shilla Duty Free, owned by Hotel Shilla, in a turn a subsidiary of Samsung Group, has spent months negotiating terms for an equity stake in the business.

In an earlier report on Inside Retail Asia in early February, Hotel Shilla conceded there was a “wide gap” between the two companies on takeover terms and the Korean company was aware several other duty-free shop operators were interested in the DFASS business.

The Shilla Duty Free is the world’s eighth largest duty free retail group, according to data from The Moodie Report, while DFASS is ranked 20th and supplies some 30 airlines with onboard duty free stocks and 35 retail stores.

In a statement the two companies said they had agreed to “enter into a broad strategic partnership to become a global leader in travel retail”.

“Shilla will acquire a 44 per cent stake in DFASS and collaborate to develop new and existing duty free concessions, expand inflight concession services and strengthen distribution agreements with brand owners.

“The acquisition allows Shilla to significantly expand its global footprint and capabilities in the United States, Latin America, the Caribbean, Africa, the Middle East and Southeast Asia, as well as diversifying its business to include master distributor agreements.”

They believe the partnership will offer a strong platform to jointly develop new concessions and to expand existing ones. Key functions across those concessions would be integrated to achieve operational efficiencies.


Shilla President and CEO Boojin Lee said the investment is consistent with the company’s strategy of profitable growth and diversification of the duty free business, the largest segment of Shilla’s business.

“The strategic partnership will enable both companies to diversify the value chain through business collaboration and generate synergies to enhance overall revenue and profitability.

“The alliance will also strengthen each company’s concession portfolio, inflight retail business, airport retail and distribution agreements with brand owners. We are excited about the partnership that will lead to greater opportunities, especially on the back of the recent concession extension at Incheon Airport.”

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