by Loren G. Edelstein | June 29, 2018
AccorHotels has signed a letter of intent to acquire a 50 percent stake in SBE Entertainment Group for US$125 million, plus another US$194 million to acquire preferred equity, for a total investment of US$319 million. Sam Nazarian, founder and CEO of SBE, will continue to own the remaining 50 percent of SBE and will retain his leadership role.
"This partnership with AccorHotels marks a new milestone in SBE's history," noted Nazarian. "Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the United States and in new markets internationally, particularly in Europe. Myself and the over 7,000 associates at SBE are thrilled and honored to partner with AccorHotels and be part of the amazing, innovative and pioneering culture that my dear friend, chairman and CEO Sébastien Bazin, and his team have implemented."
 
Accor's Bazin added that the agreement "marks a new step in expanding AccorHotels' footprint in this fast-growing segment in key U.S. cities such as Miami, Los Angeles or Las Vegas, and in other international destinations. 'The new luxury' is all about exclusive experiences and incredible lifestyle concepts, and SBE brands have the perfect know-how that will complete perfectly the AccorHotels portfolio."  
 
Founded in 2002 by Nazarian, SBE is a lifestyle hospitality company with brands including SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels. Through this agreement, SBE will accelerate its international growth with expansion into new markets outside of the U.S., with priorities being the Middle East and Latin America. SBE currently has projects in the pipeline in Atlanta; Chicago; Washington, D.C.; Dubai; Rio de Janeiro; Mexico City; Cancún and Los Cabos, Mexico; and Tokyo. By the end of 2018, SBE will operate 25 hotels, with a majority in North America, plus 170 restaurants and entertainment venues.
 
AccorHotels intends to expand its vast geographic footprint -- 4,300 hotels, resorts and residences in 100 countries - with iconic hotels in North American gateway cities such Los Angeles, Miami, Las Vegas and New York.
 
SBE hotels will be distributed on the AccorHotels distribution platform, featured on Accorhotels.com and as part of the AccorHotels loyalty program. The transaction, subject to regulatory approvals, should be completed by July 31, 2018.