Indian hotel chain company Lemon Tree Hotels has acquired Berggruen Hotels, which operates a chain of mid-market hotels, resorts and service apartments in India, in a deal worth Rs6bn ($84m).
The acquisition makes Lemon Tree the largest hotel chain in the mid-priced hotel sector in India, with an inventory to 7,800 rooms in 77 hotels across 45 destinations.
Mumbai-based Berggruen Hotels, founded in 2006, is backed by private equity firm Berggruen Holdings, and owns the Keys Hotels brand.
The brands under Keys portfolio include Keys Prima in the upper midscale segment, Keys Select in mid-scale and Keys Lite in the economy segment.
Keys Hotels are operational in 16 cities across the country – Bengaluru, Aurangabad, Chennai, Kozhikode, Goa, Mahabaleshwar, Mumbai, Pune, Gurugram, Kochi, Kolhapur, Ludhiana, Manali, Thiruvananthapuram, Port Blair and Visakhapatnam.
Lemon Tree, which already has operations in seven of these destinations, said that the acquisition of the Keys Hotels will expand its presence in these cities.
The company said that the acquisition is executed through its subsidiary Fleur Hotels. After the purchase, Berggruen Hotels will become an indirect subsidiary of Lemon Tree.
Lemon Tree Hotels chairman and managing director Patanjali Keswani said: “We are pleased about this acquisition and the geographic spread that the Keys Hotels portfolio brings with it.
“We will now instantly enter 9 new destinations and simultaneously consolidate inventory in 7 of our current destinations.
“Going forward, we will add value to the top line of these hotels both in terms of higher yield and greater occupancies.
“As a pan India mid-market player, Lemon Tree Hotels are now available across 45 cities and can offer its customers multiple options in key cities. This will help us build loyalty with our guests as well as allow us to offer a wider range of brand options to hotel owners in our managed hotels portfolio, in the future.”
In June, Lemon Tree had announced that it would acquire Berggruen Hotels.
The company, which opened a new hotel in Kolkata last month, intends to expand its presence to 107 properties over the next two years.