M&A

18 January, 2010

Dufry South America Ltd. and Dufry AG Agree on Financial Terms of Merger

Press Release Source: Dufry South America Ltd. On Monday January 18, 2010, 12:45 am EST

BASEL, Switzerland, RIO DE JANEIRO, Jan. 18 /PRNewswire-FirstCall/ -- Extraordinary cash dividend of USD 4.71 per DSA share/BDR for DSA shareholders/BDR holders – 1 DAG share/BDR for 4.10 DSA shares/BDRs – Finalization of merger agreement expected in the coming weeks.

In connection with the proposed merger of Dufry South America Ltd. ("DSA") and Dufry AG ("DAG"), the Boards of Directors of DSA and DAG have reached an agreement that DSA shareholders shall receive 1.00 DAG share in exchange for 4.10 DSA shares and DSA BDR holders shall receive 1.00 DAG BDR in exchange for 4.10 DSA BDRs. In addition, conditioned upon completion of the merger, DSA shareholders/BDR holders shall receive from DSA an extraordinary cash dividend of USD 4.71 per DSA share/BDR. The agreed terms have been proposed by the Special Committee of Board Members of DSA.

Dufry AG, a company incorporated in Switzerland, with shares listed on the Swiss Stock Exchange (SIX: DUFN), and Dufry South America Ltd., a company incorporated in Bermuda, with shares listed on the Luxembourg Stock Exchange and with Brazilian Depositary Receipts ("BDRs") listed on the Sao Paulo Stock Exchange – BM&FBovespa (BM&FBovespa: DUFB11) hereby inform the market that as disclosed in DSA's material fact and DAG's press release published on January 11, 2010, the DSA Board of Directors formed on January 10, 2010, a Special Committee of Board Members of DSA ("SCBM"), composed by a majority of independent board members, to evaluate, discuss and negotiate DAG's merger proposal, pursuant to which DSA shareholders/BDR holders would receive 1.00 DAG share/BDR in exchange for 4.10 DSA shares/BDRs. The proposal has also foreseen, conditioned upon completion of the merger, that each DSA shareholder/BDR holder will receive from DSA an extraordinary cash dividend of USD 3.92 per DSA share/BDR ("DAG's Proposal").

The SCBM carefully analyzed the details of DAG's Proposal from a DSA perspective, including in particular, the strategic, business and regulatory aspects of the proposed transaction and the appropriateness and fairness of the financial terms and conditions of DAG's Proposal. The SCBM also reviewed and discussed the valuation reports delivered by DAG and engaged Banco Santander to provide a valuation report to both Boards of Directors. The SCBM also retained an independent legal counsel.

After reviewing all the documents and information deemed necessary, the SCBM unanimously decided that DAG's Proposal was fair to DSA but could be improved. Therefore, the SCBM made a counter proposal to DAG, pursuant to which the extraordinary cash dividend to be paid by DSA to its shareholders/BDR holders should be increased from USD 3.92 to USD 4.71 per DSA share or BDR, and accepting all the other terms and conditions of DAG's Proposal ("SCBM Proposal").

DAG reviewed the SCBM Proposal and DAG's Board of Directors unanimously approved the SCBM Proposal. On January 16, 2010, following the recommendation of the SCBM, the DSA Board of Directors unanimously approved the SCBM Proposal. DAG-related DSA Board Members did not vote in such Board meeting.

DAG has retained Morgan Stanley, ING, Calyon and Credit Suisse as financial advisors to the transaction. Morgan Stanley and Calyon have analysed and reviewed the SCBM Proposal from DAG's financial point of view, and opined on its financial fairness.

It is expected that DSA and DAG will finalize the other terms and conditions of the merger agreement in the coming weeks and will inform the market of any new developments in accordance with the applicable regulations.

The merger is conditional on the execution of the merger agreement, the approval of the transaction by the shareholders of DAG and DSA, the listing of DAG's new shares on the SIX Swiss Exchange, DAG's registration with the CVM as a BDR issuer and on the listing of its shares in the form of BDRs on the BM&FBovespa.

More information on the transaction is available through the websites http://www.dufry.com/ or http://www.dufrysouthamerica.com/.