European Group Acquires Three Hotel Brands for $2.9B

By Keith Loria, Contributing Editor

Savoy Hotel

AccorHotels has acquired three iconic hotel brands—Fairmont, Raffles and Swissôtel—in a cash-and-share deal valued at a reported $2.9 billion, from FRHI Holdings Ltd.

AccorHotels will issue 46.7 million new Accor shares and pay a cash payment of $840 million to complete the purchase. As part of the deal, Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia will become major shareholders, with 10.5 percent and 5.8 percent of the share capital, respectively.

The acquisition included 155 hotels and resorts in 34 countries, with 40 of the properties currently under development. Included in the portfolio are noteworthy properties such as Raffles Singapore, The Savoy in London, Shanghai’s Fairmont Peace Hotel, The Plaza Hotel in New York, Fairmont San Francisco, Fairmont Banff Springs (Canada), Fairmont Le Château Frontenac in Quebec, the Fairmont Grand Del Mar in San Diego and Swissôtel The Stamford in Singapore.

According to a company release, the integration of Raffles, Fairmont and Swissôtel will broaden AccorHotels’ geographic footprint in the luxury segment, and enable it to optimize its luxury and upscale brands in order to adapt its offering to the expectations of an increasingly demanding clientele.

“This is an outstanding opportunity to add three prestigious brands to our portfolio, and a great step forward for AccorHotels,” Sébastien Bazin, AccorHotels’ chairman & CEO, said in the release. “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.”

Raffles, Dubai

In addition, the deal allows the company to strengthen its human capital with FRHI’s widely respected and talented 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 that both have extensive 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,” Bazin said. “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.”

The acquisition ups the company’s portfolio to over 500 luxury and upscale properties, and positions it as a key global player in this segment. FRHI teams are expected to bolster AccorHotels’ expertise in the luxury segment and provide the Group with new ambitions, through targeted, value-creative expansion.