Accor Approves Demerger of Two Business Units

Hotel giant Accor’s board of directors has approved the demerger of the group’s two core businesses, Hotels and Services, and outlined the demerger process. The company said employee representatives have already responded to the demerger plan, which will be submitted to shareholders for approval at an extraordinary shareholders meeting on June 29, 2010.

Accor said both of its business units are market leaders, with the critical mass and international reputation to operate independently. With 4,100 hotels in 90 countries and 145,000 employees, the Accor Hotels business is the European market leader and a global hotel manager focused on midscale and economy segments.

Accor Services now operates in 40 countries with 5,600 employees. According to Accor, the Services unit has become the world leader in employee and public benefits and a major provider of prepaid services, with more than 12 billion euros in issue volume in 2009.

Accor said it is clear today that Hotels and Services leverage specific skills and expertise, and operate in different business environments. The company said backed by sufficient independent financial resources, Hotels and Services will be better positioned in today’s increasingly competitive global marketplace as individual unites. Separately, the two businesses, each with its own business model, will attract a larger number of investors.

Accor will retain the Hotels business, as well as Lenotre, Compagnie des Wagon-Lits and its stake in Groupe Lucien Barriere, while a new company will be created for the Services business. All of the Services subsidiaries’ shares will be contributed to a new company (after transferring certain shareholdings in settlement of debt).

Shares in the new company will be distributed to Accor SA shareholders. Shares in Accor SA (retaining the Hotels business) and the new Services company will be listed on the NYSE-Euronext Paris stock exchange. The main steps remaining in the demerger process are: a meeting with bondholders; a vote by Accor SA shareholders at the extraordinary shareholders meeting on June 29, and a determination of the capital structure

Accor said it is committed to becoming Europe’s largest hotel franchisor and one of the world’s top three hotel groups by 2015, by leveraging five strategic strengths: A portfolio of top brands ranging from luxury to budget hotels, and operating excellence, based on a team recognized for its hospitality expertise, a comprehensive range of innovative services and a dynamic distribution strategy.