Accor sells budget US hotels to Blackstone for $1.9 bn
French hotel giant Accor said on Tuesday it had sold its US budget hotel division to the Blackstone investment fund for $1.9 billion and would use the funds to tap into growth in Asia.india Updated: May 22, 2012 14:19 IST
French hotel giant Accor said on Tuesday it had sold its US budget hotel division to the Blackstone investment fund for $1.9 billion and would use the funds to tap into growth in Asia.
"Accor announces it has signed an agreement today to sell its United States Economy Hotels Division to an affiliate of Blackstone Real Estate Partners VII, for a total value of $1.9 billion" (1.5 billion euros), it said in a statement.
The sale of 1,102 hotels with 107,347 rooms in the United States and Canada includes the Motel 6 chain and Studio 6, an extended-stay economy chain.
"I am delighted by the transaction signed with Blackstone, which ensures the future of Motel 6 and its teams in North America, where we will remain present with luxury and upscale flagships under the Sofitel and Novotel brands," said chairman and CEO Denis Hennequin.
"This deal will provide Accor with additional resources to address the tremendous growth potential in the Asia Pacific region, in Latin America and in Europe, where the leadership of our brands is one of the key drivers of our future growth," he added.
Accor, one of the world's biggest hotel groups, said last year it plans to open more than 200 new properties in Asia within three years as it looks to cash in on the region's increasing affluence.
Before the sale it had 4,400 hotels and 530,000 rooms in its stable of chains that also includes Pullman, Mercure and Ibis.
The company said the sale was part of its efforts to reduce its assets, with franchise and management contracts now accounting for over half of the rooms in its portfolio.
It said the sale would also help it cut debt by 330 million euros and lease commitments by 525 million euros.
Accor shares jumped 7.15% in early trade to 26.34 euros while Paris's CAC 40 index gained 0.90%.