One of the largest luxury brands has announced plans to buy some of the world’s most luxurious hotels and restaurants. French luxury-goods company LVMH Moët Hennessy Louis Vuitton SE has agreed to acquire London-based Belmond Ltd. (NYSE: BEL), an owner and operator of high-end hotels, for $3.2 billion including debt. The deal is expected to be completed in the first half of 2019.
LVMH agreed to pay $25 a share in cash for Belmond, a transaction that values the company’s equity at around $2.6 billion. That is a more than $7 premium to where Belmond shares closed prior to the news of the acquisition. The deal is subject to approval from shareholders and regulators.
The acquisition gives LVMH control of 46 hotels, restaurants and luxury trains and cruises across 24 countries. The hotels include Cipriani in Venice, the Grand Hotel Europe in St. Petersburg, Russia, the Copacabana in Rio de Janeiro, and including the only hotel within the Machu Picchu citadel in southern Peru. The acquisition will also give it control of the venerable “21” Club restaurant in New York City, the Venice Simplon-Orient-Express, and river cruises in Europe and Asia.
Belmond is a rarity in the hospitality industry in that it holds full or partial stakes in virtually all of its 36 hotels. The hospitality company posted adjusted earnings of $140 million on revenue of $572 million in the 12 months to Sept. 30. In August, the Belmond board announced the initiation of a strategic review that effectively put the company up for sale. Belmond’s share price has risen more than 50 percent since the announcement.
For LVMH, the acquisition of Belmond will expand its reach in the luxury world. In a statement, LVMH CEO Bernard Arnault said, “This acquisition will significantly increase LVMH’s presence in the ultimate hospitality world.” LVMH already owns a collection of luxury properties in the prestigious Courchevel ski resort in the French Alps and the Bulgari hotel brand.
