- POSTED: 23 Jan 2014 00:18
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US hotel giant Marriott announced on Wednesday it had finalised a deal to buy the Protea group, Africa's largest hotel chain, for $186 million.
JOHANNESBURG: US hotel giant Marriott announced on Wednesday it had finalised a deal to buy the Protea group, Africa's largest hotel chain, for $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 eight African countries -- South Africa, Zambia, Nigeria, Namibia, Malawi, Uganda and Tanzania.
The Nasdaq-listed Marriott Group has 3,900 properties around the world and is worth around $15.4 billion at current market prices.
After the deal was announced, Protea CEO, Arthur Gillis told AFP 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 market, nearly doubling its footprint in Africa to 23,000 rooms.
Last year, a record 56 million travellers visited Africa, according to UN statistics.
That was up six per cent 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 five per cent a year.
Gillis said 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'"
He said: "Marriott have said something completely different," in going for a takeover.
Gillis added the US firm had undertaken to take on all of Protea's staff, who number around 15,000.
Responding to suggestions that Marriott may have got Africa's most prized hotel chain at a bargain, Gillis laughed.
"Both Marriott and Protea are moderately unhappy about the price that was paid," Gillis joked.
"We have left a lot of value on the table, but that value is going to be unlocked by Marriott."
"It was an absolutely unanimous board decision."
The deal is subject to regulatory approval.