Published on : Monday, March 6, 2017
AccorHotels announces it has signed an agreement with Brazil Hospitality Group (BHG) and its shareholders, funds managed by GP Investments and GTIS Partners, in order to take over the management of 26 hotels (c. 4,400 rooms) currently owned or managed by BHG, the third-largest hotel company in Brazil.
The portfolio includes economy, midscale and upper upscale hotels in Brazil’s major markets, especially in Rio de Janeiro and Sao Paulo, complementing well AccorHotels’ existing network in Brazil, and consolidating the Group’s leadership across all segments. The hotels will undergo major renovation and repositioning works and shall progressively be reflagged until the end of 2019 under AccorHotels brands, including ibis, ibis Styles, ibis Budget, Mercure, Novotel, Mama Shelter, MGallery and Pullman, under long-term management agreements.
The management portfolio will be acquired by AccorHotels for a consideration of R$ 200m, or c. €60m at current exchange rate. The transaction is expected to close in Q4 2017 and is subject to the approval of the Brazilian antitrust authority. It will be accretive to AccorHotels results as soon as 2018, notably thanks to significant synergies with the Group’s existing operating platform in the country.
Sebastien Bazin, Chairman & CEO of AccorHotels said: “Today’s Brazil is a land of major opportunities. This transaction is a new milestone in the history of AccorHotels in this country, where we have been a firm leader for decades. It will bring new landmark hotels as well as an increased brand awareness across all segments. It also anchors a strong and long-term relationship with BHG, one of the largest owners of hotel real estate in Brazil, which will bring incremental growth opportunities going forward.”
Alexandre Solleiro, CEO of BHG said: “We are thrilled with the opportunities that this transaction creates for our company, our business partners and our teams. Because 100% of the capital generated from this transaction will be reinvested in our owned hotels, we will be able to accelerate the repositioning and performance of BHG as a leading owner of hotels in Brazil. At the same time, we will also be able to better focus our resources and management teams in the development of our business of managing third party hotels through our owned and licensed brands.”