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Marriott buying lodging company Protea Hospitality for about $186 million

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BETHESDA, Md. - Marriott is buying lodging company Protea Hospitality Holdings for about 2.02 billion rand ($186 million).

Protea has 116 hotels in seven African countries including South Africa. Its brands include Protea Hotels and African Pride Hotels, Lodges and Country Houses.

Marriott and Protea had announced their plans for the deal in November.

Marriott said Wednesday that once the transaction is complete it will become the largest hotel company in the Middle East and Africa, almost doubling its distribution in the region to more than 23,000 rooms.

Marriott has almost 3,900 properties in 72 countries and territories.

The deal includes the creation of a property ownership company by Protea, which will allow it to keep ownership of the hotels it currently owns. It will enter long-term management and lease agreements with Marriott for the hotels. The property ownership company will also keep a number of minority interests in other Protea-managed hotels. When the transaction closes, Marriott will manage about 45 per cent of the rooms, franchise about 39 per cent of the rooms and lease approximately 16 per cent of the rooms.

Marriott International Inc., which is based in Bethesda, Md., doesn't expect the acquisition to have a material impact on its 2014 results.

The deal still requires certain third party and governmental consents, including exchange control approval from the South African Reserve Bank and competition approval from the South African Competition Commission and the Common Market for Eastern and South Africa.

The transaction is targeted to close on April 1.

Marriott shares finished at $50.79 per share on Tuesday. They are up more than 29 per cent for the past year.

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