Accor has signed a definitive binding agreement to sell its approximately 30.7% shareholding in hotel owner and operator Essendi, formerly known as AccorInvest.

The agreement formalises a deal first disclosed in April, when Accor signed a memorandum of understanding (MoU) to divest its stake in Essendi to a consortium comprising Blackstone and Colony IM.

Under the agreed terms, Accor will sell its stake for total consideration of up to around €975m ($1.1bn). This includes about €675m payable at closing and a possible earn-out of up to €300m.

The transaction is aligned with the MoU, under which Essendi’s hotel portfolio will be gradually converted into franchise contracts.

The move was described by Accor as being “in line with the group's strategy to simplify and further strengthen the resilience and predictability of its business model”.

All hotels in the portfolio will continue to operate under Accor brands, with the new franchise arrangements having an average term of 20 years.

Accor said the transaction is consistent with the recurring EBITDA [earnings before interest, taxes, depreciation and amortisation] trajectory presented at its Capital Markets Day on 27 June 2023.

Completion of the sale is expected in the fourth quarter of 2026, subject to standard regulatory and antitrust approvals.

As previously stated, once the deal is completed, Accor plans to return most of the disposal proceeds to shareholders through an additional €500m share buyback programme.

Earlier this month, Accor partnered with Trust Contracting and Real Estate Investment Company to develop a new ibis hotel in Sidi Kerir, located on Egypt’s North Coast.

The 200-room property is due to open in the final quarter of 2029.