Accor looks to expand its luxury portfolio as it acquires Fairmont and Raffles in $2.9bn deal

Hotel mergers seems to be the order of the day as French hotel company Accor Hotels have announced plans to acquire Toronto-based FRHI Holdings, the owner of the luxury Fairmont, Raffles and Swissotel hotel brands in a deal closing at $2.9 billion, paid in cash and shares. Accor will pay $840 million in cash and 46.7 million in new shares for the acquisition.

FRHI is jointly owned by the sovereign wealth fund Qatar Investment Authority (QIA), Kingdom Holding, the investment firm of billionaire Prince Al Waleed Bin Talal, and Oxford Properties. The new merger will see QIA and Kingdom Holding hold a 10.5 per cent and 5.8 per cent stake in Accor, respectively.

With the acquisition of FRHI’s 155 hotels and resorts in 34 countries, Accor will increase its presence in the luxury hotel segment. Accor currently operates 3,800 properties in 92 countries with Sofitel and Pullman hotels being their upscale brands. FRHI’s luxury portfolio includes several prestigious properties including The Savoy in London, the Fairmont Peace Hotel in Shanghai and New York’s The Plaza Hotel.

Just last month Marriott International announced plans to buy Starwood Hotels and Resorts Worldwide for $12.2 billion, creating the world’s biggest hotel chain. The acquisitions are expected to allow hotel chains to better compete with companies like Airbnb, whose low prices have affected occupancies in hotels.

“The combined global presence of the new merged companies should allow them to develop guest centric technologies that other companies might not be able to carry out,” Sébastien Bazin, Accor’s chairman and chief executive said.

[ Via : Gulfnews ]

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