Marriott agrees to buy hotel brands of South Africa?s Protea
Marriott International Inc.?(MAR:US)?agreed to buy the three brands and management business of Cape Town-based Protea Hospitality Holdings, a deal that would almost double the company?s rooms in Africa.
Marriott, the largest publicly traded U.S. hotel chain, signed a letter of intent to acquire the business, which operates or franchises 116?hotels in South Africa and six other sub-Saharan countries, according to a statement today by the Bethesda, Maryland-based company. Terms weren?t disclosed.
The transaction would give Marriott 23,000 rooms in Africa and help the company grow further in the region, according to the statement. Hotel investors and operators are expanding in Africa as the continent benefits from rising demand for lodging and increasing trade with nations such as China. More than half of Africa?s countries probably will have gross domestic product growth of 5 percent annually through 2016, according to Economist Intelligence Unit Ltd.
?Africa has significant untapped potential for travel and tourism, both as a destination and source of new global travelers,? Marriott Chief Executive Officer Arne Sorenson said in the statement.?Economic growth over the next several years ?will raise more people into the emerging middle class.?
Protea owns the Protea Hotels, Protea Hotel Fire & Ice! and African Pride Hotels brands.?The company runs 80 hotels in South Africa as well as properties in Malawi, Namibia, Nigeria, Tanzania, Uganda and Zambia.
Under the deal, Protea will remain the owner of the hotels it currently owns and will retain minority interests in some of its managed properties. The transaction is scheduled to be completed in the first quarter.