Lotte Group hopes to acquire Italian airport retailer World Duty Free to grow into the world’s No. 2 duty-free shop operator, group officials said Wednesday.
According to news reports, the nation’s fifth-largest conglomerate by assets submitted a proposal to acquire a controlling stake in WDF.
Lotte Shopping, which operates Lotte Duty Free, has made the offer estimated at 3 trillion won ($2.7 billion) to 4 trillion won, the reports said.
Customers shop at a Lotte Duty Free store in Seoul. (Lotte Duty Free)
“We are interested in WDF. But it is difficult to confirm whether we submitted the proposal,” Lotte spokesman Yoon Cho-ah said.
If Lotte successfully acquires WDF, its market share will increase 14.53 percent from the current 7.55 percent. Dufry, a Swiss operator of duty-free stores, currently leads the market with 14.8 percent market share.
Lotte has been fast expanding its presence in the industry in recent years. In 2013 it was selected as the primary concessionaire for Guam’s A.B. Won Pat Guam International Airport for 10 years.
Edizione, the holding company that owns WDF and fashion brand Benneton, said recently it was selling its entire 50.1 percent stake in WDF, driven by the risk of economic slowdown in the eurozone and sluggish sales in the fashion industry.
WDF operates 533 duty-free shops in 21 countries with a 6.98 percent global market share.
About 20 percent of total sales come from the U.S. and 72 percent from Europe, indicating that Lotte can immediately have a strong presence in the European market after the acquisition.
The news comes a few weeks after Samsung’s affiliate Hotel Shilla, which controls a 4.71 percent global market share, said it is looking into acquiring Florida-based in-flight duty-free retailer DFASS.
The other bidders for stakes in WDF are reportedly Hotel Shilla, Dufry, U.S. private equity firm KKR and French media Lagardere Group.
By Suk Gee-hyun (monicasuk@heraldcorp.com)
