Jin Jiang International Holdings Co., which owns Shanghai’s 85-year-old Peace Hotel, agreed to buy Groupe du Louvre in a bid to expand its global franchise.
Jin Jiang signed an agreement with Starwood Capital Group to buy the hotel company and subsidiary Louvre Hotels Group for an undisclosed price, according to a statement on its website yesterday. The deal is valued at more than €1.2 billion ($1.49 billion), the Wall Street Journal reported, citing unidentified people familiar with the matter.
Chinese investors are snapping up trophy hotel properties around the world, seeking to cater to a growing number of wealthy Chinese that are traveling more outside the country. Anbang Insurance Group Co. is buying New York’s Waldorf Astoria hotel for $1.95 billion.
Jin Jiang, which wants to build itself into a “world-class brand name,” is expanding after profit more than tripled at its main domestic unit in the first half of this year on demand for domestic travel in China. The company owns 50 per cent of IHR Group, which manages 434 hotel properties in 11 countries, mostly in the US.
“There is strong complementary synergy between Louvre Hotels and Jin Jiang in brand portfolio, geographic footprint and guest base,” Jin Jiang’s Chairman Yu Minliang said in the statement. “We are looking forward to working with the management, employees and other stakeholders of Louvre Hotels Group to create larger space for both parties to grow globally.”
Paris-based Louvre Hotels is the second-largest hotel group in Europe, with more than 1,100 hotels in more than 40 countries, according to the statement. The transaction may be completed in the first quarter of next year.
Net income at unit Hong Kong-listed Shanghai Jin Jiang International Hotels Co. jumped 222 per cent in the first six months of this year to 422 million yuan ($68.9 million) as revenue recovered. The shares have rallied 13 per cent this year.
China’s hotel revenue per available room rose 1 per cent in September from a year earlier, the third-consecutive month of increase, as occupancy rose, Bloomberg Intelligence analysts Margaret Huang and Brian C. Miller wrote in a 24 October report.
The iconic Peace Hotel (pictured), built in 1929, has been a haven over the decades for celebrities visiting the city, including Charlie Chaplin and playwright Noel Coward.
Bloomberg News, edited by Hospitality Ireland