Davis Polk & Wardwell is advising Dufry AG on its US$446 million acquisition of Hudson Group. Having already purchased an 11.2% stake in mid-April 2008, Dufry agreed yesterday to acquire the remaining 88.8% of Hudson.

Dufry AG, headquartered in Basel, Switzerland, and listed on the SWX Swiss Exchange, is a leading global travel retailer operating 466 duty-free and duty-paid shops in airports, cruise lines, seaports, railway stations and downtown tourist areas in 44 countries. Hudson Group, which is majority owned by private equity firm Advent International, operates 540 duty-paid stores in 70 airports and transportation terminals throughout the United States and Canada.

Under the terms of the agreement, Dufry will issue 4.2 million shares, as well as zero-coupon mandatory convertible notes, which will convert into 0.9 million Dufry shares at no premium, to the selling shareholders of Hudson. Dufry will also refinance Hudson Group’s existing debt of approximately US$390 million. The transaction is subject to customary regulatory approvals.

As part of the transaction, Dufry has structured a new five-year committed syndicated facility of approximately CHF 1.25 billion, which has been fully underwritten by a group of five banks comprising Banco Santander, BNP Paribas, ING, Raiffeisen Zentralbank and Royal Bank of Scotland. The facility will be used to refinance Hudson’s debt as well as Dufry’s existing bank debt.

The Davis Polk corporate team includes partners William H. Aaronson and John D. Amorosi, associates John B. Meade and Samuel Ollunga (not yet admitted) of the London office, former foreign temporary associate Timothy R. Blanchard, former summer associate Matthew Hart and legal assistant Lindsay M. Allen. Partners Michael Mollerus and Kathleen L. Ferrell and associates Raymond J. Holst and Catherine P. Tennant are providing tax advice. Partner Karin S. Day and associate Kenneth J. Steinberg are providing credit advice. Partner Barbara Nims and associate Natasha Sankovitch are providing employee benefits advice. Counsel Betty Moy Huber and associate Elisabeth Hanratty are providing environmental advice. Counsel Susan D. Kennedy and associate Jonathan H. Pacheco are providing real estate advice. Partner Arthur J. Burke and associate Stephen M. Pepper are providing antitrust advice. Partner Paul Spagnoletti and associate Elliot Moskowitz are providing advice on litigation matters. Except as noted above, all members of the Davis Polk team work in the New York office.