It’s official. Following the approval of shareholders at the general shareholders meeting, AccorHotels Group has formally acquired FRHI Hotels & Resorts and its three luxury hotel brands: Fairmont, Raffles and Swissôtel.
Following the approval, the transaction with Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia provided a $840-million cash payment and the issuance of 46.7 million AccorHotels shares in consideration for the contributed FRHI shares. The transaction gives QIA and KHC respective stakes of 10.4 percent and 5.8 percent in Accor’s share capital. Ali Bouzarif and Aziz Aluthman Fakhroo from QIA and Sarmad Zok from KHC will now join AccorHotels’ board of directors.
AccorHotels plans to generate approximately €65 million in revenue and cost synergies due to the combination of brands; the maximization of hotel earnings; the increased efficiency of marketing, sales and distribution channel initiatives; and the optimization of support costs. The company will also make “significant enhancements” in terms of customer data thanks to the integration of FRHI’s customer base of 3 million loyalty members, 75 percent of whom are in North America.
The majority of Fairmont, Raffles and Swissôtel’s 154 hotels and resorts (of which 40 are under development) and 56,000 rooms across 34 countries and five continents are operated under long-term management contracts, with an average term of nearly 30 years; six hotels are leased and one hotel is owned. The Fairmont, Raffles and Swissôtel brands employ more than 45,000 employees worldwide.
In support of the acquisition and as part of AccorHotels’ larger strategy to strengthen its luxury and upscale business, the company has appointed Chris Cahill as the group’s CEO of luxury brands. In this newly created role, Cahill, who will also become a member of AccorHotels’ executive committee, will lead the FRHI integration process and be responsible for the strategy and global operations of AccorHotels Luxury Brands. This new structure will comprise Raffles, Fairmont, Sofitel Legend, So Sofitel, Sofitel, MGallery by Sofitel, Pullman and Swissôtel.