Marriott International Inc. has signed a letter of intent to buy the three brands and management business of Cape Town-based Protea Hospitality Holdings, a deal that would almost double the company’s rooms in Africa.
According to Marriott, the largest publicly traded U.S. hotel chain, It will buy two Protea Hotels brands and the hotel management company that looks after these brands. The acquisition will strengthen the company’s presence in the African market.Though the terms has not been disclosed, Marriott intends to enter into a definitive acquisition agreement with Protea Hospitality by the end of 2013, and expects to complete the transaction by first-quarter 2014.
Protea Hotels is one of most renowned hotel chains in Africa, focusing on hotel management, leasing and franchising. It operates through two brands – Protea Hotel Fire & Ice! and African Pride Hotels collection. Debuted in 1984, Protea Hotels now boasts as many as 116 properties with 10,184 guest rooms across South Africa and six countries in Sub-Saharan Africa including Malawi, Namibia, Nigeria, Tanzania, Uganda and Zambia.
This acquisition will help Marriott double its African portfolio by adding as many as 10,000 rooms thereby bringing the total to 23,000 rooms.
This acquisition will help Marriott double its African portfolio by adding as many as 10,000 rooms thereby bringing the total to 23,000 rooms.
According to Marriott Chief Executive Officer Arne Sorenson in the statement.“Africa has significant untapped potential for travel and tourism, both as a destination and source of new global travelers,” Economic growth over the next several years “will raise more people into the emerging middle class.”
After the acquisition, Protea Hospitality will continue to own the properties while Marriott will manage the assets under long-term management and lease contracts. Following the acquisition, 46% of Protea Hotels’ total rooms will be managed by Marriott, 40% will be franchised and the rest will be leased.
