AccorHotels to Buy Mövenpick Hotels for $560M
- May 03, 2018
Not one to shy away from major plays, Paris-based global hotel group AccorHotels has entered into an agreement to acquire Switzerland’s Mövenpick Hotels & Resorts for approximately $560 million. AccorHotels will purchase the international upscale hotel management company from Mövenpick Holding and Kingdom Holding in an all-cash transaction.
“With the acquisition of Mövenpick, we are consolidating our leadership in the European market and are further accelerating our growth in emerging markets, in particular in Middle East, Africa and Asia-Pacific,” Sébastien Bazin, CEO of AccorHotels, said in a prepared statement.
Mövenpick, which has been in the lodging business since 1973, manages 84 hotel properties encompassing more than 20,000 guestrooms across 27 countries. It’s a portfolio that will increase by 11,000 keys with the opening of 42 more properties by 2021. AccorHotels, which just celebrated the expansion of its footprint to 100 countries, presently boasts a 600,000-key portfolio of 4,300 resorts and residences. The company has been on a buying binge of sorts over the last few years, with one of its most notable deals being the $2.9 billion purchase of the Fairmont, Raffles and Swissôtel brands at the end of 2015.
AccorHotels’ acquisition of Mövenpick is on track to close during the second half of 2018, and it’s likely that more such transactions will soon follow for the company. “We have the means to grasp our acquisition opportunities in hotel—the hotel business, but elsewhere, too. So, we expect to increase the number of acquisitions we will be making over the years. So broadly speaking, we’re confident about 2018,” Jean-Jacques Morin, CFO of Accor SA, said during the company’s full year 2017 earnings presentation on February 21, 2018. Days after the presentation call, AccorHotels announced that it had agreed to sell a majority of its AccorInvest property business for approximately $5.3 billion in cash.
The consolidation continues
The $13 billion mega-merger of Marriott International and Starwood Hotels & Resorts in 2016 seemed to ignite a fury of M&A announcements in 2017, and more such activity is on tap for 2018, according to a report by commercial real estate services firm JLL. “We expect to see more hotel M&A activities, due to operators’ drive for supply growth, operational efficiency and profitability through scale,” per the report. “Through consolidation, companies are able to expand their reach to more customers, acquire more advanced platforms and achieve higher revenue.”
There’s already been a great deal of hotel-industry M&A activity in 2018. Among the highlights, Eldorado Resorts Inc. announced an agreement to acquire Tropicana Entertainment Inc. for $1.9 billion in cash. Spain’s NH Hotel Group rejected a nearly $3 billion unsolicited merger offer from domestic competitor Barceló but left the door open to other proposals. Playa Hotels & Resorts N.V. signed a deal to acquire a portfolio of five all-inclusive resorts and two developable oceanfront sites on the North Coast of Jamaica from Sagicor Group Jamaica Ltd. in exchange for 20 million shares of Playa common stock and $100 million in cash.
And AccorHotels is keeping busy; the Australian Competition and Consumer Commission recently cleared the company’s proposed $940 million purchase of resort marketer and operator Mantra Group Ltd.
Image courtesy of Mövenpick Hotels & Resorts