Taipei, Taiwan-based Regent Hotels Group will set up a joint venture with the United Kingdom's InterContinental Hotels Group (IHG) in a bid to speed up the pace for the Taiwanese hotelier to expand its reach in the global market.
Regent Hotels, known as Formosa International Hotels Corp. in Taiwan, said its board of directors has approved a proposal to establish the joint venture -- Regent Hospitality Worldwide (RHW) -- with the Taiwanese partner to hold a 49 percent stake and the British partner to own the remaining 51 percent.
Steven Pan (???), chairman of Formosa International Hotels, which bought the luxury brand Regent in 2010, will serve as chairman of RHW.
RHW will serve as a vehicle for Formosa International Hotels to extend its reach, while the Taiwanese firm will continue its expansion efforts in Taiwan.
Currently, Formosa International Hotels owns international luxury hotel brand Regent, the "lifestyle" hotel brand Silks Place, and the business hotel chain Just Sleep in Taiwan. The three brands have a total of 3,849 rooms and suites, according to its website.
Under the deal with IHG, Formosa International Hotels will also dispose of a 51 percent stake in its subsidiary Regent Hotels and Resorts, which is responsible for the Taiwanese group expanding its overseas presence, to InterContinental, for US$39 million.
According to international media, IHG will pay for the majority stake in three US$13 million tranches, the first upon completion of the deal, the second in 2021 and the third in 2024.
The British group also has the option to acquire the remaining 49 percent stake in Regent Hotels and Resorts, which is valued at US$100 million, in phases, from 2026, the reports said.
Formosa International Hotels, which has listed its shares on the Taiwan Stock Exchange since March 1998, said it is expected to book the proceeds of the transactions starting from the second half of this year.
According to Formosa International Hotels, IHG owns almost 5,300 hotels worldwide, with the number of rooms hitting 800,000. After joining the IHG booking system, the Taiwanese firm said it expects to see revenue growing future.
"IHG shares our vision for the brand and has the ability to make our ambition a reality," Pan said. "IHG has a deep understanding of how to protect what makes the Regent brand so unique and special, whilst at the same time ensuring that the brand can grow and thrive on a global scale."
Formosa International Hotels and IHG are planning to open 40 hotels around the world through RHW.
Source: Focus Taiwan News Channel