Luxury resorts chain Banyan Tree Holdings has unveiled a $24 million collaboration with hospitality giant AccorHotels that could eventually see the French firm own up to 10 per cent of the Singapore-listed company.
The move involves AccorHotels investing an initial $24 million through a mandatory convertible debenture that will give it a 5 per cent stake in Banyan Tree.
AccorHotels has an option to buy an additional stake of about 5 per cent.
They plan to develop and manage Banyan Tree branded hotels around the world, said the home-grown hospitality group in a statement yesterday.
Banyan Tree will also have access to AccorHotels' global reservations and sales network, as well as its Le Club AccorHotels loyalty programme.
Banyan Tree executive chairman Ho Kwon Ping said yesterday: "This agreement is not only transformational for Banyan Tree, but is also an innovation for the global hospitality industry.
This agreement will propel our brands rapidly to global reach and range, and strengthen our ability to embrace change and innovation in the hospitality industry with a strong global partner.
MR HO KWON PING, Banyan Tree executive chairman.
"With the current consolidation of mega hotel companies, smaller but also global players - many family-controlled - are also seeking strategic alliances with the global giants."
AccorHotels chief executive and chairman Sebastien Bazin said the collaboration was a great opportunity to also showcase its offerings to hospitality firms that have iconic brands.
He noted: "Banyan Tree Holdings has created key leading positions across Asia with luxury resorts, one of the fastest growing segments in the industry.
"We will bring scale to the network through our ability to develop and manage hotels under the Banyan Tree brands globally, hence strengthening our leadership in the luxury hotel space."
Mr Bazin was also confident that the investment will create incremental value for its shareholders.
Mr Ho added that the partnership lets the firm remain an independent company, while it continues "securing hotel management agreements on our own" and accelerating Banyan Tree's speed and scope of expansion, with AccorHotels giving its brands a boost worldwide.
The home-grown name has 43 hotels and resorts, 64 spas, 77 retail galleries and three golf courses in 28 countries, with 15 hotels and resorts under construction and a further 22 being developed.
Each resort usually has between 75 and 300 rooms with rates at the higher end of each market.
The firm has four brands: Banyan Tree and Angsana, and the newly established Cassia and Dhawa.
Mr Ho said: "This agreement will propel our brands rapidly to global reach and range, and strengthen our ability to embrace change and innovation in the hospitality industry with a strong global partner."
Banyan Tree shares closed four cents higher at 43.5 cents yesterday.