Accor shares are higher Monday after the French hotel group agreed to buy Movenpick Hotels & Resorts for €482 million. The deal is expected to boost Accor’s group earnings as soon as this year and to close sometime in the second half of this year.
By 1315 BST, Accor shares were 2.35% higher at €47.04. The stock has been generally positive during April and this deal should help it maintain that positive momentum.
Accor, Movenpick deal
The purchase comes as Accor CEO Sébastien Bazin continues his expansion plans for the French group. Movenpick Hotel & Resorts began business in 1973 and has a strong European and Middle Eastern presence, with 84 hotels in 27 countries.
The Movenpick brand is also in the process of opening another 42 hotels by 2021, with notable expansion across the Middle East, Africa and Asia Pacific.
“With the acquisition of Mövenpick, we are consolidating our leadership in the European market and are further accelerating our growth in emerging markets, in particular in Middle East, Africa and Asia-Pacific,” Bazin said.
“The Mövenpick brand is the perfect combination of modernity and authenticity and ideally complements our portfolio. Its European-Swiss heritage is a perfect fit with AccorHotels,” Bazin added.
The deal not only underscores Accor’s ambitious expansion plans, but the group’s growing interest in the luxury hotel sector.
“This transaction illustrates the strategy we intend to pursue with the opening up of AccorInvest’s capital: to seize tactical opportunities to strengthen our positions and consolidate our leaderships, as well as leverage our growth,” Bazin said.
Accor sold off some of its majority stake in its property unit earlier this year and as promised, has used some of that profit to fund a new purchase. However, there is still a considerable amount of cash still available to AccorHotels from the €5.4 billion it received, even after the Movenpick purchase.