Paris-based Accor has entered into a definitive agreement to sell an approximately 5 percent stake in Shanghai-based hotel operator and franchisor Huazhu Group Ltd. for $451 million.
Accor will keep an estimated 5 percent stake in Huazhu and Chaiman/CEO Sebastien Bazin will remain on Huazhu's board of directors.
This transaction, which was conducted in full cooperation with Huazhu and its founder/chairman Qi Ji, is expected to help Accor “crystallize the value created from the implementation of the partnership between both groups in January 2016,” a statement from Accor claimed.
Over the nearly four years since the partnership began, the value of Accor’s initial investment in Huazhu has more than quadrupled, and the companies have opened 200 economy and midscale hotels in China, mainly under the Ibis, Novotel and Mercure brands. An additional 250 properties are scheduled to open over the next three years.
A month ago, Huazhu Group entered into an agreement to acquire all shares in Frankfurt-based Deutsche Hospitality, whose portfolio includes the Steigenberger Hotels & Resorts brand, for a base cash consideration of about €700 million.
Right around the same time, Accor and Chinese retail commerce business Alibaba Group announced plans to form a “strategic collaboration” to develop a series of digital applications and loyalty programs over the next five years in a bid to bring more Chinese travelers to Accor’s hotels.