SINGAPORE, 11 December 2015: Accor Hotels announced, Wednesday, it has signed an agreement with Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System for the acquisition of FRHI Holdings Ltd, parent of Fairmont, Raffles and Swissôtel.
“This is an outstanding opportunity to add three prestigious brands – Fairmont, Raffles and Swissôtel – to our portfolio… It offers us global leadership in luxury hotels,” said Accor Hotels chairman and chief executive officer, Sébastien Bazin.
“The transaction will also enable the group to consolidate its shareholder base, with the arrival of two high-profile investors that both have extensive expertise in the hospitality industry.”
His Excellency Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, CEO of Qatar Investment Authority, said: “Since making our investment, Fairmont Raffles Hotels International has become a leading luxury hotel company with an expanded international presence. This deal generates the scale needed to drive the next phase of growth in our real estate and hospitality investments. QIA has confidence in AccorHotels and looks forward to becoming a significant shareholder.”
FRHI includes three luxury hotel brands: Raffles, Fairmont and Swissôtel.
It has 155 hotels and resorts (40 under development), and more than 56,000 rooms (13,000 under development).
Its portfolio includes such legendary properties as Raffles Singapore, The Savoy in London, Shanghai’s Fairmont Peace Hotel, The Plaza Hotel in New York, Le Royal Monceau – Raffles Paris, Fairmont San Francisco, Fairmont Banff Springs (Canada), Fairmont Le Château Frontenac in Quebec, the Fairmont Grand Del Mar in San Diego, and Swissôtel The Stamford in Singapore. FRHI has more than 45,000 employees under its brands.
FRHI’s hotels and resorts span 34 countries across five continents, with 42 properties in North America, two in South America, 26 in Europe, 17 in Africa/Middle East and 28 in Asia-Pacific. They are located in the world’s major tourist destinations, particularly in the United States. The vast majority of hotels (108) are operated under very long-term management contracts, with average remaining terms of nearly 30 years; six hotels are leased and one hotel is owned.
The integration of Raffles, Fairmont and Swissôtel should broaden the group’s geographic footprint in the luxury segment.
It already has close to 500 luxury and upscale properties.
AccorHotels aims to generate around €65 million in revenue and cost synergies due to the combination of brands.
The transaction will be accretive on earnings per share from the second year, with synergies fully effective by the third year.
The agreement with Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia provides for the cash payment of USD840 million (€768 million at the current exchange rate) and the issuance of 46.7 million Accor shares.
These shares will be issued via a reserved capital increase, subject to the approval of shareholders at an Extraordinary Shareholders’ Meeting. The transaction will leave QIA and KHC respective stakes of 10.5% and 5.8% in Accor’s share capital. Two representatives of QIA and one representative of KHC will be appointed to the Accor Board of Directors.*
This transaction is subject to the regulatory approvals of the antitrust authorities.
Accor Hotels has 3,800 resorts and hotels in 92 countries.