Hilton acquires properties with Scandic Group buyout

Nordic expansion

Hilton acquires properties with Scandic Group buyout

Report by JANEARCHER

THE HILTON Group is set to acquire Scandic Hotels, the Nordic region’s largest hotel group, for about £612 million.

The deal is not expected to be finalised until the end of June because it has to be approved by Scandic shareholders, but a Hilton spokeswoman said it is very unlikely the company will not complete the deal.

The acquisition will give Hilton 133 three- and four-star hotels in Sweden, Finland, Denmark and Norway, and a further 21 properties in the UK, Germany, Belgium, Estonia, Austria and the Netherlands.

Hilton currently has just one hotel in Scandinavia, at Copenhagen Airport, which opened six months ago.

The group plans to rebrand 20 of the Nordic properties as Hiltons, but said the rest will keep the Scandic name to retain the loyalty of Scandic’s domestic customer base. Like Hilton, the group focuses primarily on the business travel market.

Of the non-Nordic hotels, 17 will be rebranded as Hiltons, including all of those in Germany where Hilton is in the process of doubling its number of properties. “We will be rebranding those hotels that are of a quality we are happy to put the Hilton name to,” said the spokeswoman.

In all, the deal takes the number of properties in the Hilton Group to 378, with a total of 91,590 rooms.

Hilton chief executive David Michels said the deal is an important step in the company’s European expansion as it gives it a strong position in the Nordic market.

“We are buying a very good business with plenty of opportunity and, when combined, the two businesses will deliver very real benefits to both shareholders and customers,” he said.

Hilton expects to save about £8 million a year by 2003 in Scandic’s current costs by integrating sales, marketing and loyalty programmes with Hilton’s.

It also expects to increase revenues by £9 million by introducing Hilton’s yield management systems and an enhanced &#42Honors frequent-stay programme.

Snapped up: Hilton’s acquisition of the Scandic Group means hotels like the Scandic Copenhagen (left) will be marketed alongside properties such as the Antwerp Hilton