InterContinental Hotels Group has agreed to acquire a 51
percent stake in Taiwan-based Regent Hotels & Resorts from Formosa
International Hotels for $39 million in cash. IHG plans to expand the five-star
luxury brand from its six properties—Berlin, Montenegro, Singapore, Taipei,
Beijing and Chongqing, China—to more than 10,000 rooms across 40 gateway and
resort markets. Regent already has properties opening in Jakarta, Indonesia, in
2018; Harbin, China, in 2019; and Phu Quoc, Vietnam, in 2020.
IHG also will convert its InterContinental Hong Kong to a
Regent Hotel in early 2021 after a one-year refurbishment. That returns the
property to its roots; it had opened as a Regent hotel in 1990 and became an
InterContinental property in 2001.
IHG will pay $13 million when the deal closes, which is
expected in the second quarter; another $13 million in 2021; and the last third
in 2024. It will have the right to acquire Formosa's remaining 49 percent interest
in phases beginning in 2026.
The acquisition of Regent Hotels & Resorts fulfills the
strategy IHG announced last month to supplement its InterContinental Hotels
& Resorts luxury properties by acquiring more in the luxury segment. CEO
Keith Barr said then, "We see a real opportunity to round out our portfolio and add
other luxury brands at a price point above InterContinental and potentially
also in the resort space."
IHG recently formed a luxury division, and Barr reiterated upon
announcing the Regent deal that the new division will bring in more luxury
brands.