How will hotel group Accor change as a result of this week's acquisition of three high-profile hotel groups — Fairmont, Raffles and Swissôtel?
The deal, expected to close in Q2 2016, will see Accor gain a much stronger footprint in the luxury sector — Sofitel had previously been its key upmarket brand.
Overall, the deal will add 115 properties (plus 40 in the pipeline) to Accor's existing portfolio of 356 (plus 134 in the pipeline).
The breakdown of the new portfolio is as shown:
Sébastien Bazin, chairman and CEO of Accor, said: "[This acquisition] 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."
The deal is expected to increase the proportion of the group's fee revenue from luxury hotels from 19% to 35%. It promises €65 million in annual synergies, of which 55% are to come from optimising support costs and 30% from improving marketing and distribution. RevPAR at the acquired hotels has grown by 4% a year for the past five years.
Accor is issuing 46.7 million new shares and is paying US$840 million (€766m) in cash for the deal. At the same time, the Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia are to become major shareholders, with 10.5% and 5.8% of the share capital respectively.
The acquired group includes Raffles Singapore, The Savoy in London, The Plaza Hotel in New York, Fairmont San Francisco and Swissôtel The Stamford in Singapore and the acquisition will give it a significantly higher profile in North America, where it has many more properties and a larger number of clients.