France’s AccorHotels Group has announced the $2.9bn acquisition of FRHI Hotels and Resorts, owner of the Fairmont, Raffles and Swissôtel brands.
The cash and share deal is the second major takeover in a month following Marriott International’s announced $12.2bn acquisition of Starwood Hotels and Resorts.
Accor, owner of the Softitel, ibis and Novotel brands, will pay FRHI shareholders Qatar Investment Authority and Kingdom Holding’s Prince Alwaleed bin Talal’s Kingdom Holding $840m in cash and 46.7 million new shares.
The two will become some of Accor’s larges shareholders, owning 10.5 per cent and 5.8 per cent of the company respectively.
“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 sup port our guests, clients and hotel owners,” said AccorHotels chairman and chief executive Sébastien Bazin.
QIA will be granted two seats on Accor’s board and Kingdom Holding will be given one, Accor said.
“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,” said QIA chief executive HE Sheikh Abdulla Bin Mohammed bin Saud Al-Thani.
Following the deal, Accor will have 500 luxury and high-end hotels, among them the Savoy in London, the Plaza in New York and Raffles Hotel in Singapore.
The acquisition will also have significant implications in the Middle East where all three brands have a presence.
AccorHotels operates over 76 hotels in the region, with over 18,500 rooms. It has another 49 properties under development, bringing its regional total to 125 hotels with just under 32,000 rooms when completed.
FRHI, meanwhile, has 17 properties in the Middle East and Africa.
Earlier this month, Accor also announced the purchase of 29 hotels in Europe for €284m