AccorHotels Group has completed the acquisition of FRHI Hotels & Resorts (FRHI) and its three luxury hotel brands, Fairmont, Raffles and Swissôtel, following the approval of shareholders at a General Shareholders Meeting on July 12, 2016.
The move means that joining AccorHotels’ global network are a series of iconic and grande dame hotels, such as The Savoy in London, Raffles Singapore, Fairmont San Francisco, New York’s The Plaza, Fairmont Le Château Frontenac in Quebec City, and Le Royal Monceau Raffles Paris.
Chris Cahill has been named as the CEO of AccorHotels Luxury Brands, which comprises Sofitel Legend, So Sofitel, Sofitel, MGallery by Sofitel and Pullman are now combined with Raffles, Fairmont, and Swissôtel.
It’s a newly created role for Cahill, who had served as president and COO of FRHI before leaving FRHI in 2012. Cahill served as EVP of global operations for Las Vegas Sands Corp. for two years from 2012 to 2014.
In announcing the completion of the acquisition, AccorHotels revealed that it “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.” It said additionally that it “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 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.
The financials of the acquisition go like this: 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.