Britain's biggest airports management group, British Airports Authority (BAA), yesterday became the world's second-largest retailer of duty and tax free goods.
Through a US$674 million deal to buy US group Duty Free International (DFI), it has fallen just behind the world's largest tax free retailer, Duty Free Shoppers, which was recently bought by LVMH Moet Hennessey Louis Vuitton, the French drinks and luxury goods manufacturer.
The move is aimed at giving BAA's core duty and tax free business a global reach, and follows a similar plan adopted by Ireland's Aer Rianta, which recently won the duty free management contract for Chek Lap Kok.
DFI, which operates in about 175 stores employing 2,000 people, has its main businesses in North America, where it services 14 international airports, including New York's John F Kennedy and La Guardia, Chicago's O'Hare, Boston's Logan and Denver.
The move will lessen BAA's exposure to the potential loss of duty free income within Europe, if the European single currency is launched. BAA operates seven British airports including London's Heathrow and Gatwick.
BAA's offer is already recommended by some DFI shareholders, and it has irrevocable undertakings and options over further shares giving it control of 43 per cent of DFI's fully-diluted share capital.