DAR ES SALAAM, Tanzania – Marriott International, Inc. and South Africa’s Protea Hospitality Holdings last week announced a tentative deal in which the US-based chain is to buy Protea’s three brands and management company.
The deal is expected to be closed by April 1, 2014. According to a statement availed to East African Business Week and signed by Marriot International, Inc Account Manager, Kirsty Kirsten, under terms of the agreements Marriott will pay approximately about $186 million at current exchange rates, subject to normal closing adjustments.
Protea Hotels is the largest hotel group in Africa with the most extensive footprint; more than 116 hotels throughout South Africa and six other African countries, including Zambia, Nigeria, Namibia, Malawi, Uganda and Tanzania.
The transaction is subject to receipt of certain third party and governmental consents, including exchange control approval from the South African Reserve Bank and competition approval from the South African Competition Commission and the Common Market for Eastern and Southern Africa (COMESA) and satisfaction of other customary conditions for transactions of this kind.
According to the statement, Marriott does not expect the transaction will have a material impact on its 2014 results.
Protea has 116 hotels with 10,148 rooms in seven African countries including South Africa.
After April, Marriott will become the largest hotel company in the Middle East and Africa region, nearly doubling its distribution there to more than 23,000 rooms.
The statement said as part of the transaction, Protea Hospitality Holdings will create a property ownership company to retain ownership of the hotels it currently owns, entering into long-term management and lease agreements with Marriott for such hotels.
The property ownership company will also retain a number of minority interests in other Protea-managed hotels.
At closing Marriott will manage approximately 45% of the rooms, franchise approximately 39% of the rooms, and lease approximately 16% of the rooms.
Marriott and Protea announced on November 7, 2013 their intent to enter into this transaction.
Marriott International, Inc, is a leading lodging company based in Bethesda, Maryland, USA, with nearly 3,900 properties in 72 countries and territories and reported revenues of nearly $12 billion in fiscal year 2012.
The company operates and franchises hotels and licenses vacation ownership resorts under 18 brands.
Protea Hotels is the winner of two World Travel Awards for Best Hotel Group in Africa.