Vail Resorts Buys 55% Of Andermatt
The world's largest ski resort operator Vail Resorts, Inc. (Vail Resorts), headquartered in Colorado, USA, announced today that it is investing approximately CHF 149 million for a 55% stake in Andermatt-Sedrun Sport AG. This marks Vail Resorts' first strategic decision to invest in, and operate, a ski resort in Europe. The full amount of the transaction will be reinvested and used for the further expansion of the destination. Andermatt Swiss Alps AG (ASA) will continue to hold approximately 40% of the shares in the company. Vail Resorts owns and operates 40 ski resorts in the U.S., Canada and Australia.
The SkiArena Andermatt-Sedrun offers over 120km of varied terrain and a top elevation of 3000 meters across the mountains of Andermatt, Sedrun and Gemsstock, with connected access to Disentis which is owned independently. The ski area spans over 10 miles of scenic high alpine terrain between Andermatt and Sedrun, including the iconic Oberalp Pass, and is connected by the Matterhorn Gotthard Bahn that operates year-round. Vail Resorts’ CHF 110 million capital investment will be utilized for strategic projects that will significantly enhance the guest experience by increasing uphill capacity with lift upgrades and replacements; improving the quality of the snow surface through snowmaking upgrades; and improvements and expansions to dining outlets on-mountain. The partners anticipate working closely with local municipalities and stakeholders on the capital investment plans to secure the requisite approval and permits for the resort improvements.
Andermatt-Sedrun is one of the most ambitious resort development opportunities in Europe. Since originally investing in the resort in 2007, ASA’s majority shareholder, Samih Sawiris, has invested over CHF 1.3 billion into the surrounding base area and over CHF 150 million into the ski resort, creating one of the leading luxury resorts in Switzerland. ASA’s extensive investments in high end lodging in the base area include The Chedi Andermatt, a world class 5-star luxury hotel, the Radisson Blu Reussen, luxury condos, studios and apartments, as well as the development of a concert hall, an 18-hole championship golf course, and three Michelin star restaurants.
Vail Resorts' CHF 149 million investment is comprised of two components: CHF 110 million investment into Andermatt-Sedrun Sport AG for use in capital investments to enhance the guest experience on the mountain and CHF 39 million, which will be paid to ASA and fully reinvested into the real estate developments in the base area. ASA is reinvesting into the continued development of its core business in Andermatt and Sedrun of real estate, hotels, infrastructure, and expansion of Andermatt Reuss, and the CHF 110 million will be reinvested through Andermatt-Sedrun Sport AG on the mountain, including lifts, snowmaking, gastronomy, leisure offerings, and infrastructure in the ski area.
Andermatt Swiss Alps AG has historically invested approximately CHF 1.3 billion into the development of the destination Andermatt, and over CHF 150 million through Andermatt-Sedrun Sport AG to expand and modernise the SkiArena in Andermatt-Sedrun. Vail Resorts' investment into Andermatt-Sedrun Sport AG will significantly accelerate the expansion of the SkiArena Andermatt-Sedrun and the destination as a whole. The equity partnership between Vail Resorts and ASA is based on the shared vision of continuing to build and develop a world-class village and a world-class ski area.
"Vail Resorts is the ideal partner for our goal of developing Andermatt into The Prime Alpine Destination," said Samih Sawiris, majority owner of ASA. "With Vail Resorts' deep expertise in successful operations of integrated mountain destinations, the company's impressive marketing capabilities and destination guest reach, and the additional capital investment in the resort, Vail Resorts will provide a significant boost to the development of Andermatt-Sedrun."
Omar El Hamamsy, Chief Executive Officer of Orascom Development Holding AG (ODH), the other large shareholder of ASA, adds: "It is great to have Vail Resorts as a partner within our group of 14 destinations." ODH brings a long, successful track record of luxury developments across Europe and the Middle East, that when combined with the partnership and investment from Vail Resorts, will continue to bolster tourism to the destination.
"Entering the European ski market has been a long-term strategic priority for Vail Resorts. We are excited to be partnering with ASA and investing our capital and resources to support Andermatt-Sedrun's transformation into a premier destination resort," said Kirsten Lynch, Chief Executive Officer of Vail Resorts. "We plan to rely heavily on and learn from our partners, community members and the Andermatt-Sedrun team as we gain experience and understanding of the resort, its guests, and operations. We are proud to add this incredible Swiss destination to our network of world-class resorts and to the Epic Pass as we expand access for our existing pass holders and look to create an even stronger offering for skiers and riders in Europe."
“We are proud to add this incredible Swiss destination to our network of world-class resorts and to welcome Vail Resorts’ Epic Pass, Epic Day Pass and Epic Local pass holders to experience the resort’s charming villages, alpine terrain and extensive amenities as we look to create an even stronger offering for skiers and riders in Europe,” Lynch continued.
The companies' partnership goes beyond a shared commitment to elevating the guest experience. Both Vail Resorts and ASA value safety, sustainability, and contributing to the success of their local communities. Notably, both companies have existing individual commitments to protect and preserve the great outdoors: Vail Resorts through its Commitment to Zero (a zero net carbon and zero waste footprint across all resorts by 2030) and ASA through Andermatt Responsible, the company's campaign for sustainable, climate-friendly tourism in the Andermatt region with the target to zero CO2-emissions from operation by 2030.
A representative of Vail Resorts will assume the chair of the Board of Directors of Andermatt-Sedrun Sport AG, and ASA will appoint the vice chair. Matters including future organisation, and others will be decided over the coming months. Winter operations for 2021/22 will continue as planned until May 1st. There will be no change for employees.
The deal team was led by Naguib S. Sawiris, a member of the ASA Board of Directors and Chairman-designate of the Board of Directors of Orascom Development Holding AG. The transaction is expected to close prior to the 2022/23 ski and ride season. Vail Resorts plans to include Andermatt-Sedrun on the 2022/23 Epic Pass and Epic Day Pass with All Resorts Access, subject to timing of closing.
