AccorHotels snaps up Fairmont, Raffles and Swissotel
The portfolio of properties, under parent company FRHI Holdings, comprises 155 hotels and resorts, of which 40 are under development. They include such legendary names as the Savoy (operating under the Fairmont brand) in London, Raffles Singapore and the Plaza in New York.
Accor Hotels is paying for the hotels with a cash payment of £554m and the issuing of 46.7million shares to Qatar Investment Authority (QIA), Kingdom Holding Company (KHC) of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System (OMERS).
Sebastian Bazin, chairman and chief executive of AccorHotels, described the acquisition as "a great step forward" for the company, which currently operates nearly 3,800 hotels across 14 brands including the luxury Sofitel properties. It also has a large presence in the mid- market sector with Mercure and Novotel and budget sector (Ibis Hotel and F1).
"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," he said. "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."
Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, chief executive of QIA, added: "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."
The deal comprises 56,000 rooms, of which around 13,000 are under development, and 45,000 employees across the three brands.
Alongside the Savoy, the only other UK hotel involved in the deal is the Fairmont St Andrews, on the east coast of Scotland.
The majority of hotels -108 - are operated under long-term management contracts, with average remaining terms of nearly 30 years; six hotels are leased and one hotel is owned.
The addition of the Fairmont, Raffles and Swissotel brands to its portfolio, alongside its own luxury and upscale brands of Sofitel, MGallery, Pullman, Grand Mercure and the Sebel, will take Accor's presence in that sector up to 500 hotels.
Accor rebrands as AccorHotels >>
Accor opens booking platform to independent hotels >>