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Spanish hotel giants Barceló and NH Hotel Group could merge, reports say

Author:   |  November 23rd, 2017

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Both NH Hotels and Barcelo enjoy a strong brand image in Spain, which is their domestic market.

Both NH Hotels and Barceló enjoy a strong brand image in Spain, which is their domestic market.

Two leading Spanish hotel chains are mulling a merger arrangement that would create the largest hotel group in the country.

Barceló has proposed a deal to purchase its rival, NH Hotel Group, in what would be a multi-billion euro merger. According to a statement published by Barceló, the family-owned group said it has expressed a firm interest in snapping up all of NH Hotels shares for €7.08 a share…

This price represents a 27% premium on the shares’ average value, and if accepted would put the value of the NH Hotel Group at more than €2 billion euros. For its part, NH Hotel Group is unlikely to agree to a complete buyout but might well be willing to accept Barceló controlling 60% of the group, creating in effect a merger between the two giants.

If the two companies were to pool their resources the resultant mega-chain would own around 600 hotels in Europe and South America, and be sitting on annual revenues of more than €3.7 billion.

NH Hotel Group is actually, on paper at least, the larger of the two chains, owning 400 hotels to Barceló’s 230, and with a wider geographic spread, too. However, Barcelo is more dominant in the four- and five-star range, and as such enjoys larger annual revenues.

Both brands will be familiar with Spaniards and people who holiday in Spain. The Costa del Sol is home to a broad selection of hotels from both chains, meaning there will likely be little change or upheaval evident to the resorts of the region should the merger proceed as planned.

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