The year end is seeing a lot of action in the M&A space in hospitality. After Marriott-Starwood, it is now the turn of AccorHotels. AccorHotels has announced the signing of an agreement with Qatar Investment Authority (QIA), Kingdom Holding Company (KHC) of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System (OMERS) company for the acquisition of FRHI Holdings (FRHI), parent company of the Fairmont, Raffles, and Swissotel brands.
Hotel assets comprising 155 hotels and resorts, of which 40 are under development, will be a part of AccoHotels. Acquisition will provide AccorHotels a global leadership in luxury hotels, a key segment in terms of geographic reach, growth potential and profitability, for long-term value creation.
FRHI’s hotel portfolio, especially in the luxury space and wide footprint in North America, provide a stronger platform to continue aggressive worldwide expansion. AccorHotels will pay for the acquisition by issuing 46.7 million new Accor shares and a cash payment of US$ 840 million (€ 768 million) – QIA and KHC of Saudi Arabia are to become major shareholders, with 10.5 per cent and 5.8 per cent of the share capital respectively.
“This is an outstanding opportunity to add three brands – Fairmont, Raffles and Swissotel – to our portfolio, and a great step forward for AccorHotels. It offers us robust and global leadership in luxury hotels, a key segment in terms of geographic reach, growth potential and profitability, for long term value creation. In addition, the deal allows us to strengthen our human capital with FRHI’s global workforce which has a proven track record in operating and marketing luxury hotels. The transaction will also enable the group to consolidate its shareholder base, with the arrival of two high-profile investors who have expertise in the hospitality industry. This major acquisition demonstrates the group’s agility in a fast-changing industry and will allow us to more effectively support our guests, clients and hotel owners. Through it, we are positioning ourselves as a key player in the current industry consolidation process while maintaining substantial leeway to implement our transformation plan,” said Sebastien Bazin, chairman and CEO, AccorHotels.
H. E Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, CEO, QIA, said, “Since making our investment, FRHI has become a leading luxury hotel company with an expanded international presence. This deal generates the scale needed to drive the next phase of growth in our real estate and hospitality investments. QIA has confidence in AccorHotels and looks forward to becoming a significant shareholder.”