The rumors were true: AccorHotels said on Wednesday it has reached a deal to buy FRHI Holdings Ltd., operators of the Fairmont, Raffles and Swissotel brands (115 hotels and 43,000 rooms), in a deal worth US$2.9 billion.
The agreement with Qatar Investment Authority, Saudi Prince Alwaleed’s Kingdom Holding Co. and an Ontario (Canada) Municipal Employees Retirement System company includes a cash payment of US$840 million and the issuance of 46.7 million Accor shares worth about US$2.05 billion at Wednesday’s close, AccorHotels said in a statement.
The Qatar authority will retain a 10.5% stake in Accor and the Kingdom Holding will have a 5.8% stake.
“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,” Accor Chairm and CEO Sébastien Bazin said in a statement.
Of the 115 hotels, 108 properties are operated under very long-term management contracts, with average remaining terms of nearly 30 years, while six hotels are leased and one hotel is owned. Another 40 hotels with 13,000 rooms are under development.