Accor completes £1.9bn purchase of FRHI
AccorHotels has finalised its purchase of FRHI Hotels & Resorts - owner of the Fairmont, Raffles and Swissôtel brands - for £1.9bn. The deal sees the French giant take control of FRHI's global portfolio of 154 properties, including The Savoy in London and The Plaza in New York, and its 45,000 staff.
The merger was announced in December but was was finally approved by shareholders on 12 June. Veteran hotelier Chris Cahill, who worked for FRHI for 19 years, has been appointed to oversee the integration of the FRHI venues in the newly created role of CEO of Luxury Brands at Accor.
The move will expand the group's luxury portfolio to 500 hotels as it looks to establish itself as a ‘leading player' in the high-end market.
Sébastien Bazin, chairman and chief executive officer of AccorHotels, said: “The acquisition of these three emblematic luxury hotel brands is a historical milestone for AccorHotels. It will open up amazing growth prospects, lift our international presence to unprecedented heights, and build value over the long term."
Accor said it expected the merger to generate approximately £55m in revenue and savings in operating costs. FRHI was formed in 2006 and was previously owned by the Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia, and Oxford Properties, an Ontario Municipal Employees Retirement System.
As part of the deal with Accor the two Middle Eastern investors will become major shareholders in the company and add three members to the firm's board of directors.
Yesterday's deal follows a strong year of trading for Accor with profits rising 9% to £189m in 2015.
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