AccorHotels today confirmed months of rumors that it would acquire FRHI Holdings Ltd, the parent company of the Fairmont, Raffles, and Swissotel hotel brands.

Accor is purchasing the hotels from its ownership group, which includes the Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia, and an Ontario Municipal Employees Retirement System company. Accor is paying $840 million in cash and 46.7 million Accor shares, worth $2.05 billion at the end of closing today. The Qatar authority will retain a 10.5% stake in Accor and the Kingdom Holding Company will have a 5.8% stake.

“This is an outstanding opportunity to add three prestigious brands – Fairmont, Raffles and Swissôtel – to our portfolio, and a great step forward for AccorHotels,” said Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels in a statement. “It offers us robust and global leadership in luxury hotels, a key segment in terms of geographic reach, growth potential and profitability, for long term value creation.”

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The group of three brands includes 115 hotels and resorts and 43,000 rooms. It has an additional 40 hotels in development which include 13,000 rooms. They also represent the kind of stability that Accor has pushed while other brands focus on asset-light strategies: 108 properties are operated under very long-term management contracts, with average remaining terms of nearly 30 years, while six hotels are leased and one hotel is owned. Accor has nearly 500 properties of its own.

“Since making our investment, Fairmont Raffles Hotels International has become a leading luxury hotel company with an expanded international presence,” said Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, CEO of Qatar Investment Authority. “This deal generates the scale needed to drive the next phase of growth in our real estate and hospitality investments. QIA has confidence in AccorHotels and looks forward to becoming a significant shareholder.”

Photo Credit: The Claremont Fairmont in Berkeley, California. Fairmont Hotels & Resorts