Marriott finalises Protea dealComment on this story
Johannesburg - Marriott International, a leading US hospitality group, has concluded its acquisition of Protea Hospitality Group, the largest hotel group in Africa. With this deal the US company now operates more than 4 000 hotels in 79 countries.
Marriott signed a deal to acquire Protea for R2.02 billion in January. The transaction is expected to double Marriott’s rooms in the Middle East and Africa to more than 23 000, making it the region’s largest hotel company.
Marriott will now manage, lease and franchise the Protea portfolio, which consists of 10 148 rooms in African countries including South Africa, Namibia, Kenya, Malawi, Tanzania, Uganda and Zambia. Marriott is the largest publicly-traded hotel chain after Hilton Worldwide Holdings.
The purchase price is about 10 times Protea’s anticipated pro forma earnings before interest, tax, depreciation and amortisation for this year, excluding transaction costs.
As part of the transaction, the previous owners of Protea Hospitality Group have created an independent property ownership company that retained ownership of the Protea-owned hotels, and entered into long-term management and lease agreements with Marriott for those hotels. The property ownership company also retained a number of minority interests in other Protea hotels.
Marriott will manage about 45 percent of Protea’s rooms, franchise about 39 percent and lease about 16 percent.
The company will manage all Protea Hotels brands, including the Fire & Ice lifestyle brand, which caters for mid-market customers. Other brands include African Pride Hotels and Country Lodges.
Marriott president and chief executive Arne Sorenson said: “We look forward to integrating the superb Protea team into the Marriott International family, and together, to work toward new opportunities for growth and advancement throughout South Africa and the continent.”
Last month, the company announced its plans to build five-star and three-star hotels in Lagos, Nigeria, adding 400 rooms to the 700 rooms it already had in the country.
Alex Kyriakidis, the president and managing director of Marriott’s Middle East and Africa region, said: “Today is the culmination of months of highly productive collaboration between the Protea and Marriott International teams. We are delighted that such a tremendously dedicated, talented and effective team… is now joining the Marriott International family.”
He added that with the leadership of Protea chief executive Arthur Gillis, the company was well positioned for growth in one of the fastest-expanding economic markets in the world.
He also announced that Gillis would become the non-executive chairman of Africa development for the Marriott group, focusing on exploring opportunities for new hotel growth on the continent for all Marriott’s brands.
It was decided that Mark Satterfield, Marriott’s chief operations officer for the Middle East and Africa region, would relocate to Cape Town, Protea’s headquarters, to act as a business leader overseeing the integration of the two companies.
Market analysts previously said the deal would present stiff competition for local rivals Tsogo Sun and City Lodge, which also compete in the three- to four-star hospitality category. - Business Report