AccorHotels has signed 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., parent of the Fairmont, Raffles and Swissôtel brands.
The nearly $3 billion acquisition increases AccorHotels’ portfolio to nearly 500 luxury and upscale properties around the world.
AccorHotels will pay for the acquisition by issuing 46.7 million new Accor shares and a cash payment of $840 million USD. Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia will become major shareholders, with 10.5 per cent and 5.8 per cent of the share capital (subject to shareholder approval) respectively.
FRHI has 155 hotels and resorts (of which 40 are currently under development) in 34 countries across five continents. Iconic FRHI properties include the Fairmont Banff Springs, Le Château Frontenac (Quebec), The Plaza Hotel (NYC), The Savoy (London), Raffles Singapore and more.
“This is an outstanding opportunity to add three prestigious brands—Fairmont, Raffles and Swissôtel—to our portfolio, and a great step forward for AccorHotels,” said Sébastien Bazin, chairman and CEO of 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.”
Bazin also explained that the transaction and its two high-profile investors, both of which have extensive expertise in the hospitality industry, will enable the Group to consolidate its shareholder base. “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’ current portfolio includes luxury (Sofitel, Pullman, MGallery, Grand Mercure, The Sebel), midscale (Novotel, Suite Novotel, Mercure, Adagio) and economy (ibis, ibis Styles, ibis budget, adagio access and HotelF1) brands.
The transaction is subject to the regulatory approvals of the antitrust authorities. Rothschild and Zaoui & Co are acting as financial advisors and Darrois Villey Maillot Brochier and Proskauer Rose LLP are acting as legal advisors to AccorHotels on this transaction. Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are acting as financial advisors and McCarthy Tetrault LLP and White & Case LLP are acting as legal advisors to FRHI on this transaction.