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AccorHotels to sell majority stake in property arm for €4.4B

French hotelier AccorHotels agreed to sell a majority stake in its property arm, AccorInvest, for €4.4 billion in cash and announced a share buyback program of up to roughly €1.35 billion.

The company will initially sell 55% of AccorInvest to the Public Investment Fund of Saudi Arabia, Singaporean sovereign wealth fund GIC Pte. Ltd., diversified real estate investment trust Colony NorthStar Inc., French asset manager Amundi SA, Crédit Agricole Assurances SA and other investors.

AccorHotels will operate luxury and upscale AccorInvest hotels under 50-year contracts, including a 15-year renewal option, while hotels in the midscale and economy segments will be operated under 30-year contracts on average, including a 10-year renewal option.

The transaction, which is subject to certain antitrust and regulatory approvals, will be submitted for consultation at an AccorHotels shareholder meeting.

Following the closing of the transaction, expected to occur in the second quarter, AccorHotels plans to implement a share buyback program of up to €1.35 billion over a two-year period.