DRMumbai: AccorHotels has signed agreements with a group of international investors for the sale of a majority of the stake in AccorInvest. Under the terms of the agreements, AccorHotels would initially sell 55 per cent to Sovereign Funds, namely the Public Investment Fund (PIF) and GIC, Institutional Investors, namely Credit Agricole Assurances, Colony NorthStar and Amundi, among others. For AccorHotels, the sale would result in a cash contribution of €4.4 billion.
The terms of the agreement also stated that the investors made binding undertakings to carry out the transaction and AccorHotels granted them exclusivity, pending works council consultation. The transaction is also subject to certain anti-trust and regulatory approvals. It is expected to be finalised in the second quarter of 2018. AccorInvest would then be accounted for using the equity method in AccorHotels’ consolidated financial statements.
Sébastien Bazin, Chairman and CEO, AccorHotels, said, “These agreements represent a key milestone for the Group. Following the separation of AccorInvest into a standalone legal entity last summer, we are now gathering a round-table of leading investors, on the basis of a valuation that fully reflects its global leadership and the quality of its assets, while building a long-term relationship between AccorHotels and AccorInvest. These elements were essential to make this operation a success for all stakeholders.”
“The entry of new shareholders and the deconsolidation of AccorInvest will provide AccorHotels with substantial leeway to enhance our dynamic growth and innovation strategy and create value for shareholders. For its part, AccorInvest will take advantage of its new powerful shareholders’ support, as well as a strengthened financial structure to execute its roadmap and continue to reinforce its portfolio of assets.”
The AccorInvest hotels would be operated by AccorHotels under long-term contracts, namely 50 years (including a 15-year renewal option) for luxury and upscale hotels and 30 years on average (including a 10-year renewal option) for hotels in the midscale and economy segments. The management contract terms that have been negotiated between the parties are in line with market practices.
With close to 30,000 employees and operations in 27 countries, AccorInvest in the hotel real estate has a current portfolio of 891 hotels. The majority of these hotels are located in Europe, in the economy and midscale segments. Of the total, 324 are owned and 567 are operated under fixed or variable-rent leases.
