Marriott International has signed a letter of intent to acquire Protea Hotels’ brands and its management business that operates or franchises 116 hotels across three brands with 10,184 rooms in South Africa and six other sub-Saharan African countries.
The transaction would nearly double Marriott’s distribution in Africa to more than 23,000 rooms, and would also provide Marriott with a proven operational platform and leadership team to accelerate Marriott’s expansion plans and solidify its leadership position in the dynamic and growing African hotel market.
Arne Sorenson, president, chief executive officer, Marriott International, said: “Africa has significant untapped potential for travel and tourism, both as a destination and source of new global travellers.
“The continent’s GDP is anticipated to grow at over five percent annually over the next several years which we expect will raise more people into the emerging middle class.
“With the Protea Hotels acquisition, our expanded footprint should allow us to become the first choice of Africa’s rapidly growing population of young, sophisticated travellers, and drive loyalty to our Marriott Rewards program both within Africa and globally.
“Protea Hotels enjoys unparalleled brand recognition in Africa, and our combined portfolio of Protea Hotels and current Marriott International brands would create a platform for accelerated growth and new job growth in South Africa and across the continent.”
The otherwise non-binding letter of intent includes provisions that the parties will negotiate exclusively with each other.
The transaction is subject to completion of due diligence, negotiation and execution of definitive documents, receipt of customary third party and governmental consents and approvals and satisfaction of other customary conditions for transactions of this kind that the parties expect will be included in the definitive transaction documents.
The proposed terms of the transaction are not being disclosed at this time. The parties stated that they plan to sign definitive agreements by year-end 2013 and the transaction could close in the first three months of 2014.
In any event, Marriott does not expect the transaction would have a material impact on its 2014 results.