Skift Take

Deutsche Hospitality isn't a massive player on the European hospitality scene, but it has some pretty ambitious plans, ones you would assume that Huazhu would now be able to help execute.

Huazhu Group, the company formerly known as China Lodging, has agreed to buy Frankfurt-based Deutsche Hospitality for around $802 million (€720 million).

The deal will help Huazhu grow its upscale and luxury segments in Asia, including China, while expanding its international footprint.

Huazhu is buying the company from Egyptian travel and tourism company Travco Group.

Deutsche Hospitality operates the Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels brands. It has 118 hotels with 36 hotels under development in 19 countries on three continents.

The German company wants to get to 250 hotels by 2024 and the Huazhu will go some way to helping it hit that target.

“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,” said Qi Ji Founder and Executive Chairman of Huazhu Group.

Deutsche Hospitality’s joint venture in the Middle East will continue under its existing ownership.

Huazhu is listed on the Nasdaq stock exchange. Its single largest shareholder is executive chairman and founder Qi Ji. Other interesting shareholders include Accor (10.5 percent) and the newly named (7.8 percent). Huazhu also owns 4.9 percent of Accor.

Huazhu has more than 5,000 hotels in over 400 cities and is the fifth largest public hotel company by market capitalization behind Marriott, Hilton, Accor and InterContinental Hotels Group.

The acquisition is subject to regulatory approvals and will likely close at the start of 2020.

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Tags: asia, china, europe, Huazhu, mergers and acquisitions

Photo credit: The Steigenberger Frankfurter Hof hotel. Parent company Deutsche Hospitality is being bought by Huazhu. Steigenberger Hotels AG

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