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Competition watchdog signals public review of A$1.18B Accor-Mantra merger


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Competition watchdog signals public review of A$1.18B Accor-Mantra merger

The Australian Competition and Consumer Commission, or ACCC, said it will monitor and publicly review the proposed A$1.18 billion merger of AccorHotels and Mantra Group Ltd., in due course.

According to the watchdog, the process will commence once certain information is provided by the French hotelier and the Australia-listed hospitality company.

The deal, which is expected to create Australia's largest hotel group, is subject to the approval of the Australian Federal Court, the ACCC and the country's Foreign Investment Review Board.

Meanwhile, Reuters, citing IBISWorld data, reported that the entity that will be created following the merger will own approximately 50,000 rooms and control roughly 11% of the market.

In the news outlet's Oct. 18 report, analysts were cited as being optimistic that the deal would be approved, especially with new players such as Airbnb Inc. joining the competition within the hospitality industry. In spite of the expected go-ahead, some are speculating that the merging entities may be required to sell some hotels in towns where they are the only players, Reuters added.

The announced monitoring of the planned takeover came on the back of Accor and Mantra signing a binding agreement that will see all of the latter's shares purchased in cash for A$3.96 apiece. The deal, which translates to a 22.6% premium over the target's Oct. 6 closing price, was unanimously recommended by Mantra's board.