Chinese hotel chain Huazhu Group announced that it plans to acquire all shares in German hotelier Deutsche Hospitality for a base cash consideration of about €700 million.
Updated: Huazhu further stated a few hours after the first announcement that the share purchase price, taking into consideration of the base cash, cash balance, net working capital and other adjustments at closing is estimated to be approximately €719.9 million.
The deal will go through Huazhu's wholly-owned subsidiary China Lodging Holding Singapore. It is subject to regulatory approvals and certain other closing conditions and is expected to close on or around early next year.
Qi Ji, Founder and Executive Chairman of Huazhu Group, said, “This acquisition is an important milestone in our global growth strategy. Deutsche Hospitality is a perfect strategic fit and we expect competitive advantages for both companies. The brands of Deutsche Hospitality will enhance the offering of Huazhu and its operating capabilities in the high-end European hotel market.”
Jenny Zhang, CEO of Huazhu, commented,“I envision the merger of Deutsche Hospitality and Huazhu will create the foundation of a global hotel group that seamlessly combines European hospitality, German quality and Asian speed.”
Huazhu has a portfolio of more than 5,000 hotels in over 400 cities. Its loyalty program boasts more than 139 million members. Huazhu operates 18 brands across market segments covering economy to upscale and servicing the needs of business and leisure travelers. Huazhu is also the ninth-largest hotel company in the world by room count and the fifth largest by market capitalization. In 2019, Huazhu entered Japan and Singapore and established its international headquarters in Singapore.
Deutsche Hospitality operates 118 hotels and 36 hotels under development in 19 countries in Europe, the Middle East and Africa. In 2019, the almost 90-year-old hotel group announced a worldwide expansion plan to reach 250 hotels by 2024.