Homeinns Hotel Group, which operates more than 2,700 properties in China, has confirmed plans to merge with BTG Hotels Group in a deal worth US$11 billion (US$1.7bn).
In a statement released this week, Shanghai-based Homeinns said that the agreement had been “unanimously approved” by the company’s board of directors and is expected to close in the first half of 2016.
Shanghai-listed BTG Hotels currently operates approximately 100 hotels ranging from budget properties to five-star hotels under its BTG Jianguo, BTG Jinglun and Shindom brands. Its portfolio also includes the BTG International Travel & Tours Group and the Hainan Nanshan Cultural Tourism Zone.
The merger is timely for Homeinns, which has been struggling in 2015. The company experienced an 8.4% year-on-year drop in net profits for the third quarter of 2015, following declines of 15.1% and 37.7% in the first and second quarters respectively. And the company’s CEO, David Sun, said he expects “market conditions to stay difficult” for the remainder of the year.
Homeinns, which mainly operates in the budget sector, is one of the biggest hotel groups in China – and the world – with an operating portfolio of 2,787 hotels in 346 Chinese cities (as of 30 September 2015), under its Homeinn, Homeinn Plus, Yitel, Motel 168 and Fairyland brands. It also has a strong pipeline of more than 200 new hotels.
The agreement marks the second major Chinese hospitality merger in recent months, following Jin Jiang’s recent acquisition of the Plateno Hotels Group.
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