Hilton Hotels Corp. has completed the sale of its Scandic hotel chain and also has plans to sell up to 10 additional European hotels to Morgan Stanley Real Estate as the company prepares for a greater expansion of its select-service brands to the region.
The €833 million sale of the 132-hotel Scandic chain to private equity group EQT cleared in late April, according to Hilton. The company first announced its intentions to sell in March as part of a strategy to increase the proportion of its income generated by management and franchise fees and to reduce its portfolio of leased hotels. Hilton, which still has six hotels in the Scandinavian region, will use the net proceeds of the transaction, the equivalent of about $1.05 billion, to pay down debt.
Hilton also announced that it plans to sell 10 of its European properties to Morgan Stanley for about $770 million, the proceeds from which also will be used to pay down debt.
Of the $5.7 billion in assets included when Hilton acquired Hilton International last year
(BTN, Jan. 23, 2006), Hilton will have sold $3.2 billion in assets by the end of this summer, according to Matt Hart, Hilton's president and COO. Hilton also plans to introduce more of its select-service offerings internationally, he said.
"We have the ability to take all of our brands and expand their reach on a global basis," Hart said in a recent conference call. "That value will come over the next several years, as our international development efforts begin to bear fruit."