Mariott takes over Protea hotels

Kampala – US hotel giant, Marriott, the parent company of the soon-to-be opened Marriott Kigali Hotel, has finalised a deal to buy the Protea Group, one of Africa’s largest hotel chain for $186m. An official at Kampala Protea Hotel confirmed the take-over bid.South African-based Protea manages 116 hotels in eight African countries, namely Uganda, South Africa, Zambia, Nigeria, Namibia, Malawi and Tanzania. In Uganda the company manages three properties, including the Kampala Protea Hotel, he Entebbe Protea Hotel, adjacent to Entebbe International Airport and the Mbale Protea Hotel near Mt Elgon in Mbale district. A fourth property, the Hoima Protea Hotel is currently under development in the Western Ugandan town of Hoima, in the oil-rich Albertine Graben.Kampala Protea Hotel is owned by Patrick Bitature, one of Uganda’s business moguls. “Marriott and Protea plan to close the transaction on April 1, 2014,” the firms said in a statement.The US firm has undertaken to take on all of Protea’s staff, who number around 15,000. The Nasdaq-listed Marriott Group has 3,900 properties around the world and is worth around $15.5b.The deal gives Marriott a formidable position in a rapidly growing market, nearly doubling its footprint in Africa. Last year, a record 56 million travellers visited Africa, according to UN statistics.That was up six per cent from the figure for the previous year and a similar increase is expected for 2014. Business travel is also picking up on the continent as the sub-Saharan region grows at an average of five percent a year.After the deal was announced on Wednesday, Protea chief executive officer Arthur Gillis said he expected Marriott to ‘sprinkle professionalism’ on top of an already well-functioning business.“One cannot compare the resources of a company with 120 hotels with the resources of a company with 3,900 hotels,” Gillis said.Gillis said the deal places Marriott at an advantage over global competitors which had decided to build African hotels themselves, rather than acquire them.Marriott, he said, “looked at what the other global players had said they were going to do in Africa, then what the other global players have done in Africa.”“Sadly, they are two entirely different things. I’ve got many newspaper clippings, (detailing plans for) ‘50 hotels in five years’, ‘75 hotels in ten years’. Marriott have said something completely different” in going for a takeover,” he said.Responding to suggestions that Marriott may have got Africa’s most prized hotel chain at a bargain, Gillis said “Both Marriott and Protea are moderately unhappy about the price that was paid,” Gillis joked.“We have left a lot of value on the table, but that value is going to be unlocked by Marriott. It was an absolutely unanimous board decision,” Gillis said.

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Mariott takes over Protea hotels