AccorHotels has announced that the company has signed agreements with a group of international investors to sell a majority stake in AccorInvest.
AccorHotels would initially sell 55 percent of its stake in AccorInvest to Sovereign Funds, specifically to the Public Investment Fund (PIF) and GIC, Institutional Investors, specifically to Credit Agricole Assurances, Colony NorthStar and Amundi, as well as other investors. Reports say that the sale would result in a cash contribution for Accor Hotels of roughly €4.4 billion.
The Future of AccorInvest
The AccorInvest hotels would continue to be operated by AccorHotels. The difference is that now they would be kept under long-term contracts of 50 years (with 15 year renewal options) for luxury and upscale properties. For hotels that fall into the midscale and economy groupings, the operating contracts would instead span 30 years on average (with a 10 year renewal option).
Experts say that the management contract terms that have been negotiated between the two parties fall well in line with existing market practices.
For those who are not familiar with AccorInvest, it has nearly 30,000 employees and it also operates in nearly 27 countries. Experts say that AccorInvest is the world leader in hotel real estate, and that its current portfolio contains roughly 891 hotels.
Of the hotels within the AccorInvest portfolio, the majority are located in Europe, and they fall into the economy and midscale market designations. Of the total, 324 are owned and 567 operated under variable rent or fixed leases, adding a measure of stability to the properties.
The New Agreement
Under the terms of the agreements that have been signed, the investors made binding undertakings designed to carry out this transaction. AccorHotels, for its part, has granted the investors exclusivity. This is, of course, pending works council consultation.
This is all a means of saying that this new agreement is likely to be carried out. It should be noted, however, that the transaction is still also subject to certain antitrust and regulatory approvals as well. It will also be submitted as a forthcoming shareholders’ meeting of AccorHotels, with the purpose for this being consultation.
In the end, the agreement is expected to be finalized in by the second quarter of this year.
Let’s take a look at a few other projects currently underway by Accor Hotels: