AccorHotels’ Group shareholders have approved the acquisition of FRHI Hotels and Resorts (FRHI) at the General Shareholders Meeting on 12 July 2016. This acquisition would mean AccorHotels will have FRHI’s Fairmont, Raffles and Swissôtel luxury brands under its portfolio. This positions AccorHotels as a leading player in the global luxury hotel market. It significantly expands the company’s footprint in North America.
FRHI has some of the world’s most iconic and historic hotels including The Savoy in London, Raffles Singapore, Fairmont San Francisco, The Plaza in New York, Fairmont Le Château Frontenac in Quebec City and Le Royal Monceau Raffles Paris.
AccorHotels has appointed 30 year hospitality industry veteran Chris Cahill as the Group’s Chief Executive Officer, Luxury Brands. Chris will also become a member of AccorHotels’ Executive Committee. He will lead the FRHI integration process and be responsible for strategy and global operations of AccorHotels Luxury Brands which include Raffles, Fairmont, Sofitel Legend, So Sofitel, Sofitel, MGallery by Sofitel, Pullman and Swissôtel.
Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC) of Saudi Arabia provided US$840 million cash payment and issuance of 46.7 million AccorHotel shares in consideration for the contributed FRHI shares. QIA now holds a 10.4% stake while KHC holds a 5.8% stake in Accor’s share capital. Ali Bouzarif and Aziz Aluthman Fakhroo of QIA and Sarmad Zok from KHC are now AccorHotels’ Board of Directors members. Three independent directors have been added including Jiang Qiong Er, Isabelle Simon and Natacha Valla. There are now 16 Board of Directors members including one representative director. A new employee representative director will be appointed by the Group’s European Work Council within the next few weeks, in accordance to the company’s bylaws.
AccorHotels aims to generate some €65 million in revenue and cost synergies from the combination of brands, maximisation of hotel earnings, increased efficiency of marketing, sales and distribution channel initiatives and optimisation of support costs. Customer data will see significant enhancements with the addition of three million loyalty FRHI members of which 75% 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 spanning 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 is owned. Over 45,000 employees work at the Fairmont, Raffles and Swissôtel brands.
“Today is a great day for our Group. The acquisition of these three emblematic luxury hotel brands is a historical milestone for AccorHotels. It will open up amazing growth prospects, lift our international presence to unprecedented heights, and build value over the long term,” says Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels.
“We remain committed to providing guests with unparalleled service, while also keeping the ambition to deliver exceptional return on investment for our shareholders and hotel owners,” added Bazin. “By leveraging the operational synergies between FRHI and AccorHotels, we are well-positioned to accelerate the growth of our luxury brands and offer guests even more exciting hotel choices and destinations to explore.”
