GIC, Temasek to each buy up to $640 million of shares in Swiss travel retailer Dufry

ZURICH (Reuters) - Swiss travel retailer Dufry plans to raise around 3.6 billion euros (S$5.36 billion) through a mixture of debt and equity for its planned takeover of Italy's World Duty Free.

The deal will cement Dufry's position as the world's leading travel retailer, creating a combined group with a market share of 25 per cent and projected annual sales of US$9 billion.

To finance the purchase, Basel-based Dufry expects to raise at least 2.1 billion euros through a rights issue of new stock and up to 1.5 billion via long-term debt instruments, the Swiss company said in a statement on Monday.

Qatar Investment Authority, Government of Singapore Investment Corp (GIC) and investment firm Temasek Holdings have each committed to buying up to 450 million Swiss francs (S$640.09 million) worth of shares.

Dufry expects to detail the exact terms of the rights issue before a general shareholder meeting, to be held by May 15, to approve the equity financing.

Total retail spending at airports around the world is expected to almost double to US$59 billion in 2019 from U$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.

Edizione, the holding company owned by the Benetton family that controls World Duty Free (WDF), agreed to sell its 50.1 per cent stake to Dufry for 10.25 euros per share, valuing the group at just under 3.6 billion euros including debt, which stood at 970 million euros, Edizione said on Saturday.

After purchasing the stake, Dufry said it would make a mandatory bid for the remaining shares.

Dufry bought Nuance Group for US$1.7 billion last year.