Marriott International has signed definitive agreements with South Africa-based Protea Hospitality Holdings to acquire its brands and management company for around $186m.
The acquisition is subject to third-party and governmental approvals including exchange control approval from the South African Reserve Bank as well as the South African Competition Commission and the Common Market for Eastern and Southern Africa (COMESA).
The companies expect to complete the transaction by 1 April 2014, while the move is expected to have no material impact on Marriott’s 2014 results.
Currently, Protea has 116 hotels with 10,148 rooms across seven African countries including South Africa, Zambia, Nigeria, Namibia, Malawi, Uganda and Tanzania.
Following the acquisition, Marriott is expected to become the largest hotel company in the Middle East and Africa by increasing its presence in the region to over 23,000 rooms.
Under the terms of the deal, Protea Hospitality Holdings will form a property ownership company to maintain ownership of its current hotels by entering into long-term management and lease agreements with Marriott.
After the move, Marriott will operate about 45% of the rooms, franchise about 39% and lease the remaining 16%.
Marriott International currently operates 3,900 properties across 72 countries and territories; it reported revenues of about $12bn during fiscal 2012.
Founded in 1984, the Protea group has two brands – the mid-up market Protea Hotels, which owns the lifestyle brand Protea Hotel Fire & Ice!, and the superior deluxe African Pride Hotels, Lodges and Country Houses.
