US-based private equity group Starwood Capital Group has signed a preliminary agreement to sell its Groupe du Louvre hotel unit to Chinese hospitality conglomerate Jin Jiang International Holdings.

US-based private equity group Starwood Capital Group has signed a preliminary agreement to sell its Groupe du Louvre hotel unit to Chinese hospitality conglomerate Jin Jiang International Holdings.

Although financial details were not disclosed, the international budget hotel operator is rumoured to be valued between €1.2 and €1.5 bn.

Groupe du Louvre owns the luxury brand Baccarat and is a shareholder in the luxury-class Concorde Hotel Group. An 100% indirect subsidiary, Louvre Hotels Group, is the owner of the 1-3 star brands, Campanile, Première Classe, Kyriad as well as Golden Tulip, which has hotels ranging from 1 to 5-stars.

Louvre Hotels Group is the second largest hotel group in Europe, with a network of more than 1,100 hotels (over 90,000 rooms) in some 40 countries worldwide.

The transaction is subject to the 'information and consultation' process with Louvre Hotels Group's central works council, Starwood said in a statement.

Jin Jiang International Holdings is one of the premier hospitality and travel conglomerates in China, with three core businesses: hotel investment & management, travel services and transport & logistics. It owns and operates over 1,700 hotels in 11 countries.

In November 2011, Louvre Hotels Group and Jin Jiang International Holdings established a commercial partnership which introduced a co-branding programme to selected hotels in major cities of China and France. The partnership aimed at building up public awareness of Louvre and Jin Jiang in each other's home markets and boosting hotel tourism between the two countries.

The closing of the transaction is expected to take place during the first quarter of 2015.

'This agreement, as a combination of Louvre Hotels Group with Jin Jiang International Holdings, would ensure the continued growth and expansion of all brands of Louvre Hotels Group while bringing to a close of the very successful relationship between the group and Starwood Capital,' commented Barry Sternlicht, CEO of Starwood Capital Group.

Yu Minliang, chairman of Jin Jiang International Holdings added: 'There is strong complementary synergy between Louvre Hotel and Jin Jiang in brand portfolio, geographic footprint and guest base.'

It is the second investment in European hotels by Chinese investors in a week. On Tuesday, HNA Group, parent company of China's airline Hainan Airlines, completed the acquisition of 8.33% in Spain's NH Hoteles from Intesa San Paolo, bringing its stake to 29.5%.

Starwood has been an active seller of hotels in the last two years. The firm completed the sale of its Concorde Hotels luxury chain in 2013, selling the Paris Concorde Opéra hotel to Blackstone for approximately €150 mln and four hotels in Paris, Nice and Cannes to Qatari sovereign wealth fund Qatar Holding for some €800 mln. Earlier this year, Louvre Hôtels group sold a portfolio of 32 Campanile hotels in France to an 80/20 joint venture of Crédit Agricole Assurances' Predica and Pacifica insurance units and Foncière des Murs (FdM) for just over €170 mln.