AccorHotels to acquire Savoy parent company in €2.6b deal

French hotel firm AccorHotels has announced the acquisition of FRHI Holdings, the owner of 155 hotels including the Savoy in London, as part of plans to 'create a worldwide leader in the luxury segment'.

Accor is paying for the company, which owns the Fairmont, Raffles and Swissotel chains, by issuing 46.7 million new Accor shares, worth about €1.8bn based on Wednesday's closing price, and by making a cash payment of €768 mln.

The shares are being placed with FRHI's vendors the Qatar Investment Authority and the Kingdom Holding Company of Saudi Arabia, which will become two new AccorHotels shareholders, with a 10.5% and a 5.8% stake respectively. The third vendor, Canadian Group Oxford Properties is not participating in the share part of the deal.

FRHI owns 155 hotels and resorts around the world, of which 40 currently under development. In total they provide over 56,000 rooms with the portfolio including legendary properties such as Raffles Singapore, The Savoy in London, Shanghai’s Fairmont Peace Hotel, The Plaza Hotel in New York, and Le Royal Monceau -Raffles Paris.

Sebastien Bazin, chairman and chief exec at Accor, said: 'The transaction will also enable the group to consolidate its shareholder base, with the arrival of two high-profile investors that both have extensive expertise in the hospitality industry. 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.'

The deal follows two major acquistions in Europe by the French hospitality giant. In early December AccorHotels bought three hotel portfolios comprising 29 hotels and 3,677 rooms in separate transactions with AXA IM, Deutsche AWM and Invesco for a total of €284 mln.

In November it acquired a portfolio of 43 hotels in France from listed property group Foncière des Régions for €281 mln.

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PropertyEU's December 2015 edition features a special report on the European hotel investment sector.

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