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Homehotels restaurants and leisureAccor buys Raffles owner for $2.9bn

Accor buys Raffles owner for $2.9bn

Accor, Europe's largest hotel group, has bought the owner of the Fairmont, Raffles and Swissotel hotel chains for $2.9bn in cash and shares, in the second major hotel takeover in a month.

Accor, which announced the deal for FRHI Hotels & Resorts on Wednesday, said that the purchase of 115 luxury hotels and resorts and a further 40 under development would create a "worldwide leader in the luxury segment".

The French group will pay Qatar Investment Authority and Prince Alwaleed bin Talal's Kingdom Holdings $840m in cash and 46.7m new shares. The two Middle Eastern investors will be among Accor's biggest shareholders, owning 10.5 per cent and 5.8 per cent of the company, respectively.

As part of the transaction, QIA will have two seats on Accor's board while KHC will take another, Accor said.

The deal comes as major hotel companies are chasing scale, and occupancy and room rates reach record highs, especially in the US. Revenue per available room, the industry metric, is already 13 per cent higher in the US than it was in 2007, the previous peak in the cycle. Last month, Marriott International bought Starwood Hotels and Resorts in a $12.2bn deal.

Sebastien Bazin, Accor's chairman and chief executive, said that he had never considered an all-cash deal because he wanted to carry out the acquisition without impairing the group's investment grade rating or interrupting its three-year reorganisation of the business.

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