Teddy Sagi to pay NIS 40m for Sakal Duty Free

Teddy Sagi  photo: Yossi Cohen

Sagi will acquire full ownership of Sakal Duty Free, Sakal Global Duty Free, and Layam.

Billionaire Teddy Sagi is gaining his first foothold in the Israel retail market. Sagi signed a deal to acquire the duty-free activity of the Sakal family for NIS 40 million, sources inform "Globes." Three companies are being acquired in the deal: Sakal Duty Free, Sakal Global Duty Free, and Layam.

The price is higher than first reported, because the original report mentioned only the acquisition of Layam, but all three companies were acquired outright in the end, thereby ending the Sakal family's partnership in the business, as was originally intended.

The sales turnover of the acquired activity is estimated at NIS 200 million. The three companies have 200 employees. Sagi appointed Shay Tangi, CPA (41), until recently CFO of the Sakal group, as CEO of the acquired business. Meir Sakal, brother of Soli Sakal, will remain in the company as a special advisor to the acquired companies. At the same time, the company will not be managed by a Sakal family member, as was originally considered.

Layam operates a number of retail stores, seven of them at Ben Gurion Airport, including a food store at Terminal 3 near the Steimatzky's store, a chocolate stand, a children's fashions store, and a toy store. The company also operates a toy store at Terminal 1 and a food store and a toy store in the games area before passport control. In addition to the stores at Ben Gurion Airport, the company has a duty-free store in central Tel Aviv that serves foreign diplomats and their families. In addition to these eight stores, Layam holds a franchise to operate duty-free services on the cruise ships of Mano Maritime, a franchise that previously belonged to James Richardson.

A smaller activity of Layam is operating stores exempt from customs duties on bases on the Golan Heights used by the UN and in the Sinai used by the multinational force there. Layam also supplies merchandise to duty-free stores on UN bases all over the world.

Not all of Layam's activity is retail, however. The company supplies provisions to ships in all of Israel's ports and outside them and supplies duty-free goods to various concerns, such as airlines, UN and NATO forces, and other commercial concerns.

In addition to Layam, Sagi is acquiring Sakal Duty Free, which includes the operation of a duty-free store in Ashdod Port and supplying ships in the port, and Sakal Global Duty Free, which operates the duty-free store in Haifa Port. The deal also includes a new logistics center in Ashdod Port that can serve the acquired activity, as well as other activities.

First entry into retail activity in Israel

The Sakal family is retaining its retail business, include the fashion activity of Sakal Sport, which operates the Emporium chain; its toys business; and additional fashion business - the SBN Clothing subsidiary jointly owned with the Brill group (TASE: BRIL) (50%), under which the Timberland and Nautica chains operate.

Most of Sagi's current activity in Israel is in high tech and real estate; this is his first venture into retail business in the local market, while he does hold ecommerce business in Europe.

"The Sagi group plans to study the duty-free business in depth and consider the expansion of Layam's local activity to additional airports and seaports around the world in order to improve and expand the business," the company announced.

The company added, "Layam's direct access to hundreds of suppliers worldwide will facilitate greater exposure to the Sagi group's ecommerce activity." Sagi plans on creating cooperation between the activities he acquired and ecommerce of the group he owns.

Published by Globes, Israel business news - en.globes.co.il - on October 24, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Teddy Sagi  photo: Yossi Cohen
Teddy Sagi photo: Yossi Cohen
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