Publicly traded hotel firm Choice Hotels International has agreed to acquire Radisson Hotel Group’s Americas division, Radisson Hotel Group Americas, for approximately $675 million.
The deal will add 624 hotels with over 68,000 rooms to Choice’s portfolio in an effort to increase its presence in the upscale and upper-midscale segments in the West Coast and Midwest in the U.S., according to a news release announcing the deal. Choice President and CEO Pat Pacious had indicated a desire to grow through acquisitions during the company's most recent earnings call.
In a statement to Hotel News Now, Choice officials indicated “the transaction is the latest chapter in our history of bringing our best-in-class franchising platform to adjacent segments and new sets of hotel owners."
“The acquisition of some of the industry’s most recognized brands extends Choice Hotels’ customer reach in the upscale segments and enhances our presence in the core upper-midscale segments. We are confident that guests, franchisees and our shareholders will significantly benefit by combining these two exceptional sets of brands,” added the Rockville, Maryland-based company.
The cash deal, which will be funded by a combination of cash on hand and Choice borrowing from its existing credit facility, includes the franchise agreements, operations and intellectual property for:
- 10 Radisson Blu hotels
- 130 Radisson hotels
- 9 Radisson Individuals
- 1 Park Plaza hotel
- 4 Radisson RED hotels
- 453 Country Inn & Suites by Radisson
- 17 Park Inn by Radisson hotels
- The Radisson Inn & Suites and Radisson Collection brands
All of the properties are across the United States, Canada, Latin America and the Caribbean. Radisson's business in other parts of the world will remain independent of the deal. Radisson’s majority owner is Chinese state-owned Jin Jiang International, which also owns French hotel firm Louvre Hotels.
Radisson’s European division has nine brands, including Radisson, Radisson Blu, Park Plaza and Prizeotel, while its newly acquired Americas division has seven, including Radisson Red, Park Inn by Radisson and Country Inn & Suites.
The deal is expected to close in the second half of 2022 and has already been unanimously approved by Choice's Board of Directors.
"Choice has a well-established history of smart acquisitions in new segments where our world-class franchising engine can spur future growth,” Pacious said in the news release. “This transaction brings together two highly complementary businesses, enhancing our guest offerings in the core upper-midscale hospitality segments, while extending our reach into the upper upscale and upscale full-service segments and in higher revenue geographic markets. We are confident that guests and franchisees will significantly benefit by combining these two exceptional sets of brands."
Radisson CEO Federico González said in the new release the company has been committed to expanding the reach of its global operations, and plans on doubling its portfolio in the Europe, Middle East and Africa and Asia-Pacific markets by 2025.
“We are confident that Choice Hotels is the owner with the right long-term strategy, resources and management team to successfully accelerate the growth of the Radisson business in the Americas,” González said. “Together with Choice, we will work to ensure that customers continue to experience the highest levels of service and a superior brand experience."
Hotel News Now reached out to Brussels-based Radisson, but the company declined to comment specifically "beyond [its own] press release at this time.”
Trevor Simpson contributed to this article.