PETALING JAYA: Berjaya Land Bhd (BLand) is acquiring a 75% stake in Icelandair Hotels ehf for US$53.63 million (RM220 million) cash.
BLand told Bursa Malaysia that its subsidiary Berjaya Property Ireland Ltd had entered into a share purchase agreement with Icelandair Group hf for the acquisition.
Icelandair Hotels currently operates 20 hotels located all around Iceland. In addition, a new five-star 145-room hotel developed in collaboration with Hilton Hotels is scheduled to be launched in Reykjavik’s Parliament District in 2020. The total earnings before interests, taxation, depreciation and amortisation of these hotels was about US$12 million for the financial year ended Dec 31, 2018.
Iceland Stock Exchange-listed Icelandair Group operates in the airline and tourism sectors. The company operates through three segments: international flight operations, aviation investments, and tourism investments.
Besides increasing Berjaya’s presence in the European region, this acquisition also increases the room inventory of the Berjaya group of hotels from about 4,200 to 6,011 rooms, with an additional 1,811 rooms. Currently the Berjaya group of hotels are operated under the Berjaya Hotels and Resorts, Four Seasons, and Sheraton brands in Europe and Asia.
BLand said the proposed acquisition is in line with the group’s geographical diversification and revenue expansion. The luxury hotel segment in Iceland is expected to grow and the exercise will enable the BLand group to enter this segment with strategically located hotels in the heart of Iceland as well as certain hotels being operated under the Hilton brand name.
Berjaya Corp Bhd founder and executive chairman Tan Sri Vincent Tan is pleased with this investment, which is at a low entry cost, with an average cost/price of about US$75,096 per room.
“The Icelandair Hotels is one of the largest hotel chains in Iceland, and its hotels are operated at a very high standard by a passionate and dedicated team. We are delighted to add this hotel group to our growing network of hotels and resorts,” he said in statement.
“We look forward to working with the Icelandair Group. I believe this investment represents good long-term value for Berjaya,” he added.
The proposed acquisition is expected to be completed during the financial year ending June 30, 2020.