IHRA #31: Rezidor SAS and Carlson Hotels Worldwide Enhance Their Partnership with Shareholder Agreement

Member News > Chain Member News > Carlson Buys 25% stake in Rezidor SAS

Rezidor & Carlson representatives present at IH&RA Board & Chains Council dinner on day of announcement

Rezidor SAS and Carlson Hotels Worldwide Enhance Their Partnership with Shareholder Agreement

In a deal that could dramatically change its business model, Carlson Hotels Worldwide has exchanged future franchise fees on its European hotel operations for a 25% ownership stake in Rezidor SAS Hospitality which operates 250 Carlson hotels in Europe, the Middle East and Africa.

On 14 March, Rezidor SAS Hospitality, the Brussels-based subsidiary of the SAS Group, jointly announced with US-based Carlson Hotels Worldwide, that they have signed an agreement which results in an enhancement of their long-time franchise partnership into a shareholder agreement.

The basis of the agreement will see Carlson Hotels acquire a 25 percent shareholding in Rezidor SAS from SAS Group in return for renegotiated commercial terms of the parties' current Master Franchise Agreement (MFA). The MFA is the agreement between Rezidor SAS and Carlson by which Rezidor manages Carlson Hotel brands in Europe, the Middle East and Africa (EMEA). These brands have included Radisson SAS, Park Inn, Regent International Hotels and Country Inns & Suites.

Rezidor SAS first signed an agreement with Carlson in 1994 for the first class Radisson brand. The combined brand, Radisson SAS, that was created from that MFA has been the vehicle that has turned Rezidor SAS into one of the fastest growing hotel management companies in the world today.

The success of this initial Radisson SAS partnership then led to Rezidor SAS and Carlson signing a further multi-brand MFA agreement in 2002 that added three other Carlson brands to the Rezidor SAS portfolio - Regent, Park Inn and Country Inns & Suites. This has proved to be another sparkling success story that has seen the high volume mid-market brand Park Inn, grow from zero to over 60 properties in just two years in the EMEA region; while also facilitating the re-launch of the luxury brand Regent, with Rezidor SAS adding two new landmark hotels, in Berlin and Zagreb, to the global Regent portfolio.

As a result Rezidor SAS has grown from 29 Radisson SAS hotels, when the original agreement was signed in 1994, to now having in total 245 hotels open or under development.

This new deal, which is pending regulatory approval and is expected to take place in the first half of 2005, has an option for Rezidor SAS to use the Carlson brands to 2052, an increase of twenty years on the previous agreement. It will now bring the two companies even closer together and allow for stronger brand alignment on a global basis.

"Carlson Hotels Worldwide is a strategic partner within the global hospitality sector for Rezidor SAS. The SAS Group will maintain the majority holding and control over Rezidor SAS, while also strengthening the strategic business platform. It will bring additional scale and profitability to Rezidor SAS and further enhance its development opportunities," said Mr. Gunnar Reitan, Executive Vice President and Deputy CEO of the SAS Group and Chairman of Rezidor SAS."
Curtis Nelson, President of Carlson Companies, parent company of Carlson Hotels Worldwide, said: "We are pleased to announce this important investment as a demonstration of our strategic commitment to the hotel business as a key part of Carlson's future growth plans and our respect
for our partners at SAS."

Mr. Kurt Ritter, President & CEO of Rezidor SAS further commented: "We've proven that this is a partnership that works. When we initially signed a deal with Carlson back in 1994, we were a small hotel group with only 29 properties. Now we operate the key global Carlson Hotel brands throughout Europe the Middle East and Africa, with a portfolio of 245 hotels in 47 countries, and we're on track to reach our target of 700 properties by 2012. This deal will help to support this growth and I see it as a fantastic opportunity for everybody at Rezidor SAS and all the stakeholders involved in this new venture."

Mr. Jay S. Witzel, President & CEO of Carlson Hotels Worldwide added: "this deal is an exciting next step in our successful partnership with Rezidor SAS which will more closely align our two companies for the benefit of our brands, customers and employees." Globally, Carlson Hotels Worldwide includes nearly 900 locations in 69 countries under five brands.

The deal will give Carlson two seats on the six-member board of Rezidor SAS.

Key representatives from Carlson Hospitality & Rezidor SAS attended the 14 March IH&RA Board of Directors & Chains Council dinner in Berlin where they toasted the announcement made earlier that day "Carlson Acquires 25% Stake in Rezidor SAS."

Photo Top Left - Taken on 14 March, day of the announcement, at the IH&RA Board and Chains Council dinner held at the Hilton Berlin:
Left to right:
- Gordon McKinnon, Senior VP , Marketing, Brands, Corporate Communications Rezidor SAS Hospitality SA
- Nancy Johnson, Executive VP/Brand Leader for Country Inns & Suites by Carlson and Park Inn, Carlson Hotels Worldwide
- Bjorn Gullaksen, Executive Vice President, Full Service Hotels, Brand Leader Radisson Hotels & Resorts - Park Plaza Hotels & Resorts, Regent International Hotels
- Tom Polski, Vice President Public Relations/Communications/Corporate Relations Carlson Hotels Worldwide

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