InterContinental Hotels has agreed to buy a 51% stake in Regent Hotels and Resorts for $39m in cash, with the right to acquire the remaining 49% interest in a phased manner from 2026.
The company said the deal was part of its new strategic initiatives focused on continuing to expand its footprint in the fast-growing $60bn luxury segment. The initiative is supported by the creation of a new dedicated division to further enhance IHG's capabilities in this area and will be funded by its efficiency programme, as outlined in its full-year results last month.
InterContinental will bring Regent into its brand portfolio at the top end of the luxury segment and will accelerate its growth globally. It plans to grow the brand from six hotels to more than 40 in key global gateway city and resort locations over the long term.
The deal is expected to close in the second quarter of this year.
In addition, the company announced that following an extensive refurbishment due to commence in early 2020, InterContinental Hong Kong will become a Regent Hotel in early 2021.
Chief executive officer Keith Barr said: “IHG is already one of the world leaders in luxury with our InterContinental Hotels and Resorts brand, but we see significant potential to further develop our global footprint in the fast-growing luxury segment. As one of the pioneers in defining luxury hotels both in Asia and around the world, Regent is an excellent addition to IHG's portfolio of brands.
“We see a real opportunity to unlock Regent's enormous potential and accelerate its growth globally. In addition, by creating a dedicated luxury division, we will be bringing together some of the most experienced and respected people in the industry who will help drive our luxury offer, ensuring that our existing luxury brands continue to evolve and allowing us to bring in new brands such as Regent to enhance our brand portfolio.”