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Grand in Stockholm trades for $1.56M per key

Foundation Asset Management (FAM) AB has entered into an agreement with Patricia Industries, a part of Investor AB, to acquire the Grand Group, which includes the hotel businesses Grand Hôtel, Lydmar Hotel and The Sparrow Hotel, and the Grand Hôtel real estate property owned by Vectura, a subsidiary of Patricia Industries.

The total transaction value amounts to SEK 3.9 billion (US$462 million), of which approximately SEK 0.3 billion (US$36 million) for the Grand Group and approximately SEK 3.6 billion ($426 million) for the 273-room Grand Hôtel property in Stockholm (US$1.56 million per key). The transaction, subject to the approval of the Swedish Competition Authority, is expected to be closed in the second quarter of 2021.

Given the related party relationship that prevails between FAM and Investor AB, the valuation and other terms of the transaction have been evaluated by third parties. Investor AB is controlled by the Wallenberg family, while FAM AB, the Sweden-based asset management group, manages the wealth of certain Wallenberg family foundations.

The 273-room Grand Hôtel in Stockholm
The 273-room Grand Hôtel in Stockholm

The Grand Hôtel has been home to many international and national guests since 1874 and has been owned by Investor AB since 1968.

“We are pleased that the Grand Group is now getting a new home with us at FAM,” said FAM CEO Håkan Buskhe. “With the hotels’ strong brands located in iconic buildings in central Stockholm, we see an exciting and long-term potential for their positive development going forward, despite the current challenges of the COVID-19 situation. In addition to its prominent hotel and restaurant business, the Grand Hôtel property fits well into our portfolio as a real estate asset with great opportunities. We look forward to working with the board of directors, management and employees to further develop the Grand Group’s concept and customer offerings, as well as the property and thus Stockholm.”

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