Covivio has entered a memorandum of understanding (MoU) with AccorInvest to merge the ownership of their jointly owned hotel operating and property companies.
This move comes after the initiation of exclusive negotiations in November 2023, with the transaction expected to be finalised in the last quarter of this year.
Covivio, through its subsidiary Covivio Hotels, currently holds 54 hotels under long-term variable-rent leases with AccorInvest.
AccorInvest manages these hotels and has long-term management contracts with the Accor Group.
Covivio Hotels CEO Tugdual Millet said: “Today marks another important step in our partnership with AccorInvest.
“The agreement will contribute to Covivio’s development in the hotel sector and gives us the opportunity to draw on the full range of our real estate and hotel expertise.”
The MoU involves Covivio Hotels acquiring 24 hotel operating companies, leading to the direct ownership and operation of these hotels.
Meanwhile, AccorInvest will gain title to ten hotel property companies.
The transaction values the property companies transferred to AccorInvest at €208m ($222.7m), while the operating companies acquired by Covivio Hotels are valued at €266m ($284.76m).
This move allows Covivio Hotels to gain control of operating companies in tourist locations, presenting opportunities for value creation through repositioning and management enhancements.
Some of the hotels involved in the deal will continue to operate under Accor brands, either through management or franchise agreements, while others are set to be rebranded.
This development is in line with Covivio's strategy to diversify its hotel real estate portfolio, which includes both leased assets and operating properties.
Additionally, Covivio Hotels, as an indirect owner and asset manager, oversees another 60 hotels leased to AccorInvest.
These are held through two joint ventures established in 2010 and 2014.
Ownership is shared between Crédit Agricole Assurances, Caisse des Dépôts et Consignations, Société Générale Assurances, and Covivio Hotels.
Covivio Hotels and its partners will also acquire 19 operating companies from the joint ventures, while transferring six hotel property companies to AccorInvest, according to the latest move.
The consolidation efforts of Covivio Hotels and its joint venture partners amount to a total transaction value of €393m for the hotel property companies sold.
This value is matched by the operating companies that will be owned and operated by the entities whose shares are to be acquired.
Upon completion of the deal, Covivio Hotels and its partners will have consolidated ownership of 43 hotels, with AccorInvest taking ownership of 16.
