AccorHotels buying owner of luxury hotels in $2.9 billion deal
AccorHotels has been aggressively expanding its portfolio in recent months. It's set to acquire FRHI Holdings Ltd., parent of the Fairmont, Raffles and Swissotel hotel chains, in a deal worth $2.9 billion. Hotels that will now be under AccorHotels' control include London's Savoy and New York's Plaza.
AccorHotels made the deal, it's largest to date, to fend off online rivals such as Airbnb and competitors InterContinental Hotels Group Plc and Marriott International, that just acquired Starwood Hotels & Resorts for a similar reason. The Paris-based group has agreed to pay for FRHI Holdings with $840 million in cash and $46.7 million in new shares.
Sebastian Bazin, chairman and CEO of AccorHotels, believes this deal will help position the group against competitors that are squeezing the market.
"This is an outstanding opportunity to add three prestigious 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," said Bazin
With the acquisition, AccorHotels will instantly become one of the largest brands of luxury hotels in the world.
Bazin went on to note the acquisition will help the hotel better service its customers.
"The major acquisition demonstrates the Group's agility in a fast-changing industry and will allow us to more effectively support out guests, clients and hotel owners," said Bazin.
FRHI properties are located in some of the most prestigious, major tourist destinations in the world.