AccorHotels has agreed to sell 55% of AccorInvest for €4.4b (£3.9b) to a group of international investors.
The group of investors includes Saudi Arabia's Public Investment Fund, Singapore investment firm GIC, Credit Agricole Assurances, real estate and investment management firm Colony NorthStar and asset management firm Amundi, among others.
Sébastien Bazin, chairman and chief executive of Paris-based AccorHotels, said: "These agreements represent a key milestone for the group. Following the separation of AccorInvest into a stand-alone legal entity last summer, we are now gathering a round-table of leading investors, on the basis of a valuation that fully reflects its global leadership and the quality of its assets, while building a long-term relationship between AccorHotels and AccorInvest.
"The entry of new shareholders and the deconsolidation of AccorInvest will provide AccorHotels with substantial leeway to enhance our dynamic growth and innovation strategy and create value for shareholders."
The agreement will be submitted to AccorHotels shareholders for consultation and is expected to be finalised in the second quarter of 2018.
Following the transaction, the French hotel company intends to implement a share buyback program of up to €1.35b (£1.2b) over two years.
AccorInvest has a portfolio of 891 hotels, mostly in Europe in the economy and midscale segments, of which 324 are owned and 567 are operated under fixed or variable-rent leases.
The AccorInvest hotels would be operated by AccorHotels under very-long-term contracts, namely 50 years (including a 15-year renewal option) for luxury and upscale hotels and 30 years on average (including a 10-year renewal option) for hotels in the midscale and economy segments.
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