Starwood Hotels & Resorts is accelerating its march into the European hotels business with the purchase of London-based hotel and leisure group Le Meridien. The global hotel operator is backed by US-based private equity investor Starwood Capital, which is also paying more than US$4bn to gain control of Group Taittinger, the French hotel and luxury goods group.
The deal for Le Meridien is estimated at over US$1bn and will see Starwood take control of the Le Meridien brand and all related management and franchise business for more than 130 hotels and resorts. Hotel brands Sheraton, Westin, St Regis Luxury Collection and the “W” are already part of the Starwood capital portfolio.
Affiliates of Lehman Brothers and Starwood Capital are forming a separate joint venture to acquire the owned and leased hotel portfolio of Le Meridien. Closing of the brand purchase transaction is subject to terms and conditions including completion of employee consultation and the real estate sale.
The deal is not unexpected as Lehman teamed up with Starwood Hotels to buy US$1.3bn of Le Meridien’s senior debt in 2004. The bank bought out Merrill Lynch and CIBC’s senior creditor positions. Starwood put up US$200m as part of the deal, which followed talks with the Hyatt group to restructure Le Meridien after the business collapsed.
Starwood Capital has agreed to acquire a 65% interest in Taittinger from the Taittinger family (37.8%), Albert Frere (25%), and Robert Peugeot for €1.166bn.