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Investing.com -- InterContinental Hotels Group (LON:IHG) (IHG) on Tuesday acquired the Ruby brand in a move aimed at expanding its footprint in the premium urban lifestyle segment.
The deal, valued at about $116 million, is expected to enhance IHG’s portfolio and provide significant growth opportunities in key city destinations.
The deal comes as IHG reports strong results for 2024, with operating profit from reportable segments rising by 10% and adjusted earnings per share increasing by 15%.
IHG’s full-year results for 2024 post a revenue increase of 7% to $2.31 billion from reportable segments, with total global revenue reaching $4.92 billion, up 6% from the previous year.
The company’s fee business revenue grew by 6%, contributing to an improved fee margin of 61.2%, an increase of 1.9 percentage points.
Meanwhile, net system growth was reported at 4.3%, driven by the addition of 371 new hotels to IHG’s portfolio. Shareholder returns were strong, with over $1 billion returned through dividends and share buybacks.
The Ruby brand, known for its "lean luxury" concept, currently operates 20 hotels across major European cities, including London, Vienna, and Munich.
The brand has an additional 10 properties in the pipeline, with locations set to open in cities such as Rome, Edinburgh, and Marseille.
IHG plans to accelerate Ruby’s global expansion, particularly in the Americas and Asia, leveraging its extensive distribution network and loyalty program.
IHG’s deal strategy aligns with its broader objectives of strengthening its brand portfolio and capitalizing on high-growth markets.
CEO Elie Maalouf said that Ruby’s flexible, space-efficient design and strong customer appeal make it an attractive addition to IHG’s offerings.
The brand’s emphasis on automation, self-service check-in kiosks, and stylish yet affordable accommodations positions it well for modern travelers seeking high-quality urban stays.
The deal also comes at a time of increased shareholder returns from IHG, with the company completing an $800 million share buyback program in 2024 and announcing a new $900 million buyback initiative for 2025.
The company’s confidence in long-term growth is further supported by a 10% increase in its dividend payout.