The consolidation of the lodging industry appears to be in full swing with the latest announcement of AccorHotels to acquire Fairmont, Raffles and Swissôtel by issuing 46.7 million new Accor shares and a cash payment of $840 million, according to this official press release.
AccorHotels to acquire Fairmont, Raffles and Swissôtel
This strategic deal — which will include greater than 56,000 rooms in 155 hotel and resort properties, of which 40 are currently under development — is the result of the signing of an agreement with the Qatar Investment Authority; Kingdom Holding Company of Saudi Arabia; and Oxford Properties, an Ontario Municipal Employees Retirement System company for the acquisition of FRHI Holdings Ltd, which is the parent company of the Fairmont, Raffles, and Swissôtel brands.
As a result of this acquisition, AccorHotels — which is based in France — will not only have a larger presence in North America; but it will also be a key player in the luxury and upscale hotel property segment of the lodging industry.
Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia are to become major shareholders, with 10.5 percent and 5.8 percent of the share capital respectively.
Key Hotel and Resort Properties
Key hotel and resort properties which will become part of the worldwide portfolio of AccorHotels include:
- Raffles Singapore
- The Savoy in London
- Fairmont Peace Hotel in Shanghai
- The Plaza Hotel in New York
- Le Royal Monceau – Raffles Paris
- Fairmont San Francisco
- Fairmont Banff Springs in Canada
- Fairmont Le Château Frontenac in Quebec
- Fairmont Grand Del Mar in San Diego
- Swissôtel The Stamford in Singapore
There is no official word as of yet how Le Club Accorhotels — the frequent guest loyalty program — will look once the acquisition has been completed. This is assuming that regulatory approval has been granted for this deal by the appropriate government entities and stakeholders.
AccorHotels currently has approximately 3,800 properties in 92 countries prior to the consummation of this deal under such brands as Sofitel, Novotel, Mercure and Ibis.
Reaction
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Summary
This announcement comes after the news that Marriott International, Incorporated announced its acquisition of Starwood Hotels and Resorts Worldwide, Incorporated for $12.2 billion on Monday, November 16, 2015.
Hinting that there may possibly either be more mergers and acquisitions in the future, the press release states that this deal will “provide a stronger platform to continue aggressive worldwide expansion” for AccorHotels in what portends to be further consolidation of the lodging industry worldwide.
Source: AccorHotels.
