ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Business deals

German hotel chain Steigenberger bought by Chinese peer for $800m

Acquisition defies slowing China investment in Germany

Steigenberger Hotels & Resorts is a well-known brand in Europe with a history going back 89 years. (Photo courtesy of Deutsche Hospitality)

FRANKFURT, Germany -- Major Chinese hotel operator Huazhu Group will acquire the company behind the Steigenberger luxury hotel chain for 719.9 million euros ($793 million), the Shanghai-based company announced Monday.

The Nasdaq-listed Huazhu will buy all shares in Deutsche Hospitality through a Singaporean subsidiary. Huazhu, established in 2005, operates more than 5,000 hotels in 400 cities worldwide. The company says it ranks ninth globally by room count.

Chinese corporate investment in Germany has slowed lately due to increased scrutiny by authorities in Berlin, but some observers see the two countries moving closer again amid sluggishness in the European nation's economy.

Deutsche Hospitality operates 118 hotels, mainly in Europe, including  such brands as the 89-year-old Steigenberger and the IntercityHotel business chain.

Huazhu began as a provider of budget accommodations but has gone upscale. The latest acquisition is part of an effort to strengthen its luxury hotel business. Under Huazhu's umbrella, Deutsche Hospitality will press ahead with plans for expanding to 250 properties, including in the Middle East and Africa, by 2024.

Chinese investment in Germany totaled $500 million in the January-June period, down about 95% on the year, according to Ernst & Young.

German regulators have tightened rules for acquisitions and investments by non-European companies. Last year, Berlin objected to the planned acquisition of a precision machinery manufacturer, prompting the Chinese suitor to withdraw its bid.

But Germany may be reconsidering its hard-line stance. When German Chancellor Angela Merkel visited China in September and met with President Xi Jinping, she called for more investment in Germany and refrained from criticizing Beijing over its handling of the pro-democracy protests in Hong Kong.

And last month, Germany unveiled security guidelines for fifth-generation wireless networks that stopped short of banning products from Chinese telecom equipment supplier Huawei Technologies.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more