Starwood Capital Group (SCG) has bought a controlling interest in Societe du Louvre, Europe's second largest hotel group, which owns the luxury Concorde Hotel group and the budget Envergure group.
Under the deal, SCG also takes a 65% stake in major champagne producer Groupe Taittinger
which has a 44% holding in Societe du Louvre. The total cost of Starwood's investment is €1.2bn.
SCG beat off the French wine and spirits company Pernod Ricard which was also hoping to buy Groupe Taittinger.
The sale sees 14 of the Concorde group go to Starwood, including hotels in France, Belgium, Switzerland and the Berlin property due to be opened in September.
Among the hotels sold are the Hotel de Crillon, Hotel Lutetia and the Hotel du Louvre, all in Paris.
Envergure has 805 hotels in Europe which are marketed under the Campanile and Premiere Class budget brands and the mid-market Kyriad and Bleu Marine brands.
SCG is a property investment trust founded by Barry Sternlicht in 1991. Mr Sternlicht also founded Starwood, the hotel and resort group.
He resigned as ceo of the hotel group earlier this year to concentrate on SCG of which he is also ceo.
Mr Sternlicht said his plans for Societe du Louvre were to grow its economy hotel business in France and find new markets like
Eastern Europe, invest in the renovation and restoration of “several of its existing jewels” and extend its brands around the world.
SCG, which is based in Connecticut, USA, is also currently in a joint venture with Lehman Brothers to acquire the hotels owned by Le Meridien group which would be then managed by Starwood Hotels.