AccorHotels is pursuing one of the most aggressive mergers and acquisitions strategies in the entire hospitality industry. The company could be called a serial acquirer, making numerous acquisitions and investments in various sectors and seeing what resonates with customers. Ultimately the company’s goal is to become an all-in-one travel experience platform that can cover any aspect of travel, any need or desire of consumers traveling, or even locals craving experiences in their areas.
Our latest Skift Research report, A Deep Dive Into AccorHotels 2018: Measuring Success From Asset-Light to Acquisitions, provides an overview of the various acquisitions, investments, and strategic partnerships that Paris-based AccorHotels has been making over the past few years. We also offer several ways of measuring the success of the company’s M&A strategy including evaluating investor views based on stock price performance, calculating enterprise value (a measure of a total company’s takeover value) creation over the past five years, looking at the financial performance of the company’s New Business operating segment, and more.
In the excerpt below, we provide an overview of our stock price performance analysis. Based on our research, investors have generally viewed the company’s M&A strategy favorably, as the company’s stock price has, on average, outperformed the CAC 40 (a benchmark French stock market index) on transaction announcement days.
Last week we launched the latest report in our Skift Research service, A Deep Dive Into AccorHotels 2018: Measuring Success From Asset-Light to Acquisitions.
Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of the trends.
ACCOR’S ACQUISITIONS, INVESTMENTS, AND STRATEGIC PARTNERSHIPS
Since October 2014, AccorHotels has made around 30 acquisitions, investments, or strategic partnerships, which we detail in the table below. The company has made investments in luxury hotel companies, international hotel companies, co-working spaces, concierge, dining, event services, digital booking platforms, and more.
The average purchase price per transaction, where data is available, is $235 million. The median is $26 million.
MEASURING SUCCESS: STOCK PRICE PERFORMANCE ANALYSIS OF ACQUISITIONS
One way to assess Accor’s acquisition strategy is to see how stock investors react to the different announcements. In this analysis, we calculated the stock price return the day of the announcement of a given acquisition, partnership, or investment. We assessed this return relative to the return of the CAC 40, which is a benchmark French stock market index. The index tracks the performance of the 40 largest French stocks based on the Euronext Paris market capitalization. It makes sense to compare Accor versus this index, rather than the S&P 500, for instance, because the company is a constituent of the index and trades on the Euronext.
Our analysis suggests that, on announcement days, Accor’s stock price outperformed the CAC 40 by 0.6 percent on average. The highest outperformance was 3 percent, and the lowest underperformance was -2.2 percent.
We note there are likely other market and idiosyncratic factors in play. Nevertheless, the analysis should be an indicator that, on average, investors generally view Accor’s acquisitions and investments favorably.
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