Paris-based Louvre Hotels Group acquired on Thursday a controlling stake in India’s Sarovar Hotels Pvt. Ltd., which operates 75 hotels in the premium, mid-range and budget sectors. Terms of the deal were not disclosed.
Sarovar’s existing investors, including U.S.-based venture capital firm Bessemer Venture Partners and private equity firm New Vernon Private Equity, are walking away from their 28% stake made in December 2005, with a profit about three times their US$8 million investment, according to sources with knowledge of deal particulars.
Sarovar reportedly had been in advanced talks with Wyndham Worldwide before the Jin Jiang International-controlled operator completed the deal, which reportedly marks the first Chinese hotel investment into neighboring India.
Louvre, with more than 1,175 hotels and 100,000 guest rooms in 51 countries, has been present in the Indian sub-continent since 2007 and currently manages 22 hotels under its Golden Tulip brand. Reports suggest the Golden Tulip properties will continue to be operated separately from the new Sarovar assets.
In fact, Anil Madhok and Ajay Bakaya will continue to lead the Sarovar Group’s management, where there is expected to be no changes in the management structure.
“Number 2 in Europe, Number 1 in China, and now a leader in India, we really are a major global player, present in all major markets, and in all the hospitality segments,” said Pierre-Frédéric Roulot, chief executive of Louvre Hotels Group.
A press release from the two groups added, “Both hotel groups share the desire to continue developing Sarovar Hotels brands. This powerful platform will also sustain the development of Louvre Hotels Group brand.”
Over the past five years, Sarovar has grown from 4,500 rooms to nearly 6,000 in over 50 cities. It has a secured a pipeline of over 16 hotels, most of which are due to join the network shortly.