Scandic Hotels Group is to add another 43 hotels to its portfolio with the $127 million purchase of Finland-based Restel’s hotel operations.
At the end of 2016, according to research by Morgan Stanley, Scandic was the smallest of a list of seven European hotel operators, behind Rezidor, Melia and Whitbread. It also had by far the smallest pipeline.
Its strategy is somewhat different to its competitors (other than Whitbread) in that it isn’t strictly speaking pan-European and instead focuses on the Nordics, something this deal will enhance.
Restel meanwhile will concentrate on growing its restaurant business, which will soon include the first Taco Bell in Finland.
“This is an important step forward for Scandic Hotels and one that will give us a strong network in the Finnish market. We look forward to operating and developing these hotels under the Scandic brand going forward and to welcome all of the Restel team members and customers to Scandic,” said Frank Fiskers, president and CEO of Scandic.
Analysts at Morgan Stanley gave the acquisition the thumbs up, saying: “The deal looks sensible from a strategic aspect, strengthening its leadership position in the Nordics and becoming the largest hotel operator in Finland.”
Scandic was once owned by Hilton hotels but was sold to private equity firm EQT for $1.1 billion in 2007. Scandic snapped up rival chain Rica Hotels in 2014 before relisting on the Stockholm Stock Exchange a year later.