Spanish companies aren’t alone in extending their links to the Latin American markets in a bet to withdraw from the volatile European economies. France’s group Accor this week announced its plan to set itself as a sector leader in the area with the acquisition of the South American hotel portfolio of Grupo Posadas. The transaction, which adds to the external growth strategy of the company, includes 2,600 rooms and a secured pipeline of 2,000 rooms.
The acquisition of this hotel portolio of Grupo Posadas, a Mexican hotel company, is
“fully in line with Accor’s ambitious development strategy launched last September, which includes notably Accor’s ability to reinforce its presence in emerging markets through selective acquisitions,” the French corporation explained.
The Posadas deal follows the Mirvac acquisition in Australia and New Zealand, closed on May 22.
The total amount paid by Accor for this acquisition is $275 million. The transaction includes 15 hotels, of which 4 owned hotels, 4 variable leased hotels and 7 hotels under management contract. These hotels are located in key cities as São Paulo and Rio de Janeiro in Brazil, Buenos Aires in Argentina and Santiago in Chile. Of these 15 hotels, 11 are located in Brazil, main regional economic force.
The acquisition of this portfolio will reinforce the brands operated in the region: Sofitel, Pullman, Novotel and Mercure. The transaction also includes a secured pipeline of 14 hotels under management contract and the acquisition of two brands operated by Grupo Posadas in South America: Ceasar Park and Ceasar Business.
With this accord, the French group’s network in Brazil will reach 164 hotels and 26,200 rooms, covering the spectrum of hotel segments and resulting in a reinforced presence in the up & midscale segment, just before two major sports’ events: the World Football Cup in 2014 and the Summer Olympic Games in 2016.
In total, Accor’s portfolio in South America will consist of more than 200 hotels and about 34,000 rooms.
“With its strong financial position and now a structurally generating cash model, the Accor Group through this acquisition will record another success and confirms its ambitious expansion plan,” said CEO Denis Hennequin.
Completion of the deal should occur by the end of 2012. The group described the operation as a “strategic milestone”. Within the next three years, Accor and Posadas pipelines combined will allow the French firm to operate more than 300 hotels.