(Yicai Global) Feb. 28 -- Huazhu Hotels Group Ltd. [NASDAQ:HTHT] is set to acquire boutique chain Crystal Orange Hotel Holdings Ltd. as it looks to become a world-class hotel management company.
Investors, led by US investment fund Carlyle Group, have signed an equity purchase agreement to wholly purchase Beijing-based Crystal Orange for CNY3.65 billion (USD531 million), Huazhu Hotels said yesterday. Capital operations in the hotel industry have become more frequent in recent years as competition and cooperation between leading firms hots up, according to insiders.
"Crystal Orange's hotel designs are unique in China," said Zhang Min, chief executive at Shanghai-based Huazhu. "The younger generation and fashion lovers enjoy its distinctive style. After the merger, with the brands Crystal Orange owns, which differ from our product lines, we can provide our 78 million members with more diversified hotels to choose from, consolidating our market lead as consumers seek higher quality options."
Crystal Orange will operate independently to encourage creativity and entrepreneurial spirit from the management team, Zhang added. Huazhu's brand portfolio strategy will look to use Crystal Orange's design and innovation abilities to build the group into a leader in the designer hotel market.
Huazhu was founded in 2005 and originally known in English as China Lodging. It has more than 3,200 hotels in over 370 Chinese cities and owns 12 hotel brands including Hanting, Ibis, Novotel and Grand Mercure.
Set up in 2006, Crystal Orange runs over 200 hotels through brands including Crystal Orange Hotel, Orange Hotel Select and Orange Hotel. Crystal Orange Hotel is a leading designer hotel brand in China and has won several awards over the past few years.