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LONDON - InterContinental Hotels Group PLC (LON:IHG), a global hospitality leader, announced on Tuesday the acquisition of the Ruby brand from Ruby SARL for an initial purchase consideration of €110.5 million (approximately $116 million), marking the addition of its 20th brand to the company's diverse portfolio. The Ruby brand, which is recognized for its 'Lean Luxury' concept, operates 20 hotels across major European cities and has another 10 hotels in the pipeline.
The acquisition includes the Ruby trademark and related intellectual property, positioning IHG to further its global expansion in the premium urban lifestyle segment. Ruby's current operations span 3,483 rooms with an additional 2,235 rooms expected to open in various European cities over the next three years. The brand is known for its space-efficient designs that cater to modern travelers and offers a cost-effective model for hotel owners, particularly in the urban micro segment where space is at a premium.
IHG's CEO, Elie Maalouf, expressed enthusiasm for the acquisition, citing the opportunity to grow Ruby's European base and extend its reach to the Americas and Asia. He highlighted IHG's track record in internationalizing brands and noted the franchise-friendly nature of the urban micro model.
Michael Struck, Founder and CEO of The Ruby Group, expressed confidence in IHG's ability to elevate the Ruby brand's international expansion, leveraging IHG's distribution and technology systems, as well as its prominent hotel loyalty program, IHG One Rewards.
The transaction includes an upfront payment of €109.9 million and a deferred payment of €0.6 million. IHG anticipates franchise fees from the current and pipeline Ruby hotels to be around $8 million in 2028, with projections exceeding $15 million by 2030. The integration of Ruby hotels into IHG's system is expected to commence later in 2025 and be completed by March 31, 2026.
This strategic move is expected to bolster IHG's global system size and profitability, with integration operating costs for IHG estimated at $10 million in 2025. The company foresees a breakeven contribution to operating profit in 2026 and growth thereafter.
The acquisition is based on a press release statement and reflects IHG's ambition to cater to the strong demand in the urban micro sub-segment and to continue expanding its global presence in the hospitality industry.
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