Business
Marriott acquires Africa’s largest hotel chain Protea
US hotel giant Marriott announced on Wednesday it had finalized a deal to buy the Protea group, Africa’s largest hotel chain, for US$186 million.
“Marriott and Protea plan to close the transaction on April 1, 2014,” the firm said in a statement.
Based in South Africa, Protea manages 10,148 rooms in 116 hotels in 8 African countries including: Malawi, Namibia, Nigeria, South Africa, Uganda, Tanzania and Zambia.
The Nasdaq-listed Marriott Group has 3,900 properties around the world and is worth around US$15.5 billion at current market prices.
After the deal was announced, Protea CEO Arthur Gillis told reporters that he expected Marriott to “sprinkle professionalism” on top of an already well-functioning business.
“One cannot compare the resources of a company with 120 hotels with the resources of a company with 3,900 hotels.”
The deal gives Marriott a formidable position in a rapidly growing African market, nearly doubling its footprint in Africa to 23,000 rooms.
In 2013, a record 56 million travelers visited Africa, according to UN statistics.
That was up 6 percent from the figure for the previous year and a similar increase is expected for 2014.
Business travel is also picking up on the continent as the sub-Saharan region grows at an average of 5 percent a year.
According to Gillis, the deal placed Marriott at an advantage over global competitors which had decided to build African hotels themselves, rather than acquire them.
Marriott, he said, “looked at what the other global players had said they were going to do in Africa, then what the other global players have done in Africa.”
“Sadly they are two entirely different things. I’ve got many newspaper clippings, (detailing plans for) ’50 hotels in five years,’ ’75 hotels in ten years'”, said Gillis.
“Marriott have said something completely different” in going for a takeover, he said.
Marriott had undertaken to take on all of Protea’s staff, who number around 15,000, he added.
Responding to suggestions that Marriott may have got Africa’s most prized hotel chain at a bargain, Gillis added: “both Marriott and Protea are moderately unhappy about the price that was paid,”.
On the Nasdaq in New York, Marriott’s share price rose a modest 0.5 percent in the first half hour of trade.
Copyright 2014 AFP