AccorHotels announced February 27 the plans to sell a 55%t stake in its AccorInvest real estate unit for 4.4 billion euros (US$5.4 billion) cash.
The new investors are the sovereign wealth funds of Saudia Arabia’s Public Investment Fund (PIF) and Singapore’s GIC.
Institutional investors include, among others, Credit Agricole Assurances, Colony NorthStar and Amundi, and other investors.
The proceeds from the deal will give AccorHotels the resources to fuel its expansion.
Sébastien Bazin: Entry of new shareholders will enhance group’s growth.
“The entry of new shareholders and the deconsolidation of AccorInvest will provide AccorHotels with substantial leeway to enhance our dynamic growth and innovation strategy and create value for shareholders,” AccorHotels chairman and chief executive officer, Sébastien Bazin, said in a statement.
“For its part, AccorInvest will take advantage of its new powerful shareholders’ support, as well as a strengthened financial structure to execute its roadmap and continue to reinforce its portfolio of assets,” he added.
The French hotel group separated AccorInvest into a dedicated subsidiary last year in order to bring in new investors, and to accelerate its transformation and growth.
AccorInvest currently has a portfolio of 891 hotels, the majority of which are located in Europe, in the economy and midscale segments. Of the total, 324 are owned and 567 are operated under fixed or variable-rent leases.
AccorHotels will operate the hotels under long-term contracts for up to 50 years (including a 15-year renewal option) for luxury and upscale hotels (such as Pullman and Sofitel respectively) and 30 years (including a 10-year renewal option) for hotels in the midscale and economy segments (such as Mercure and Ibis respectively).
The French firm said the negotiated management contract terms between the parties are in line with market practices.
The transaction is subject to certain antitrust and regulatory approvals. It is expected to be finalised in the second quarter of 2018.
• Images credit: AccorHotels (Feature image – Sofitel Sydney Darling Harbour’s infinity pool)
