In a $2.8 billion deal, French hospitality company Accor SA is acquiring the Fairmont, Raffles and Swissotel luxury hotel brands.
AccorHotels last week yesterday the signing of an agreement with the 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 Ltd. (FRHI), parent of Fairmont, Raffles and Swissôtel.
“This is an outstanding opportunity to add three prestigious brands – Fairmont, Raffles and Swissôtel – 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 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. 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 Accor chief executive officer Sébastien Bazin.
The agreement with Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia provides for the cash payment of $840 million (€768 million at the current exchange rate) and the issuance of 46.7 million Accor shares.
FRHI’s hotels and resorts span 34 countries across five continents, with 42 properties in North America, two in South America, 26 in Europe, 17 in Africa/Middle East and 28 in Asia-Pacific.
Accor operates the Ibis and Sofitel chains and has 3,800 hotels worldwide.