AccorHotels Acquires FRHI, Brings In Qatar Investment Authority And Kingdom Holding Company As Stakeholders
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French hospitality group AccorHotels has ramped up its hospitality portfolio with the acquisition of FRHI Hotels and Resorts (FRHI), which will see Accor operating and managing 150 hotels in the Middle East, comprising more than 45,000 rooms across the luxury and economy segments. The deal brings three reputed hospitality brands -Fairmont, Raffles and Swissotel- into Accor’s network. Accor has sealed the acquisition by entering into a stock-swap deal with two prominent entities in the region- Qatar Investment Authority (QIA) of Qatar and Saudi Arabia’s Kingdom Holding Company (KHC), both former shareholders in FRHI, who have now gained respective stakes of 10.4% and 5.8% in Accor and also been allotted seats in its Board. According to a statement on the deal, the transaction with QIA and KHC accounted for $840 million in cash payment and issue of 46.7 million AccorHotels shares. Ali Bouzarif and Aziz Aluthman Fakhroo from QIA and Sarmad Zok from KHC will join AccorHotels’ Board.
Commenting on the deal, Sébastien Bazin, Chairman and CEO, AccorHotels, says that with “two renowned investors that are great specialists of the global hotel sector becoming new shareholders,” AccorHotels stands to gain a lot with their expertise. Representatives of both QIA and KHC Group noted that the FRHI acquisition is likely to position AccorHotels as a key player in the luxury hospitality industry and strengthen its status as a leading hotel operator. Accor expects the deal to generate “approximately €65 million in revenue and cost synergies.” The company also looks forward to expand its customer database, thanks to integration of FRHI’s customer base- that includes three million loyalty members, 75% of whom are in North America. To support the acquisition and ensure seamless integration of the FRHI Group with AccorHotels, Accor has appointed Chris Cahill as the Group’s Chief Executive Officer, Luxury Brands in a newly created role.