PPL’s acquisition of Baltona Duty Free – now approved – looks like disastrous timing

Polish competition regulator UOKiK has approved the move by Polish Airports State Enterprise (PPL) to acquire travel retailer Baltona Duty Free from Flemingo International Ltd BVI, paving the way for PPL’s takeover of a 80.68% stake in the company. The planned acquisition was announced in October 2019.

“There are vertical ties between these two companies. PPL leases commercial surface at airports to Baltona. However, the performed control shows that this does not pose any threats to [maintaining sufficient market] competition,” the regulator said in a statement.

The body said that “the market share of Baltona is not high enough to allow the takeover to limit the competition among the lessees of stores and restaurants at airports” in the Polish market.

The latest development allows Flemingo International to finalise the deal. Last October, the company inked an agreement with the state-run business to sell Baltona Duty Free which has been listed on the Warsaw Stock Exchange since 2012. The UOKiK approval allows Flemingo to subscribe to a public tender launched by PPL to acquire 100% of shares in Baltona Duty Free.

The value of the acquisition was not disclosed in the statement. Under Polish law, the competition watchdog’s approval is a prerequisite to completing all takeovers and mergers of Poland-based companies if the concerned entities reported total revenues of at least €1 billion worldwide, or €50 million in the Polish market in the year that precedes the transaction.

Baltona Duty Free currently operates retail outlets at eight Polish airports: Warsaw-Chopin, Warsaw-Modlin, Poznań, Kraków, Rzeszów, Katowice, Olsztyn, and Bydgoszcz. In addition to the Polish market, the company is also active in a number of other European countries where it runs retail and catering businesses. These include Italy, France, Estonia, Romania, and Ukraine. Flemingo International took control of Baltona Duty Free in 2010.

PPL holds stakes in 12 airports in the Polish market, including Warsaw-Chopin, Warsaw-Modlin, Szczecin, Rzeszów, Poznań, Olsztyn, Bydgoszcz, Wrocław, Katowice, Radom, Zielona Góra, and Gdańsk.

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