In yet another round of hotel company consolidation, Paris-based AccorHotels
announced it has agreed to acquire FRHI Holdings
, the parent company of three iconic luxury brands - Fairmont, Raffles, and Swissôtel. The combined portfolio consists of 155 hotels in 34 countries, including 42 in North America, plus another 40 under development.
"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," said Sébastien Bazin, chairman and CEO of AccorHotels, in a statement announcing the company's new venture. He added, "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."
AccorHotels will pay for the acquisition by issuing 46.7 million new Accor shares and a cash payment of $840 million (€768 million). Qatar Investment Authority and Kingdom Holding Co. of Saudi Arabia, owners of FRHI, will become major shareholders.
Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, CEO of Qatar Investment Authority, said: "Since making our investment, Fairmont Raffles Hotels International has become a leading luxury hotel company with an expanded international presence. 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."
FRHI's portfolio includes such legendary properties as Raffles Singapore, The Savoy in London, Shanghai's Fairmont Peace Hotel, The Plaza Hotel in New York, Fairmont San Francisco, Canada's Fairmont Banff Springs, Fairmont Le Château Frontenac in Quebec, the Fairmont Grand Del Mar in San Diego, and Swissôtel The Stamford in Singapore. FRHI has more than 45,000 employees under its brands.
The deal will significantly boost AccorHotels in the luxury segment and make it one of the key global players. The purchase will be subject to the approval of shareholders on both sides of the agreement later this year.