Chinese state-owned BTG Hotels Group has announced an agreement to buy rival Homeinns Hotel Group, for around US$1.7 billion.
BTG Hotels will pay a 18.7% premium on the current share price for NASDAQ-listed Homeinns and it will then be de-listed in the US when the transaction completes during the first half of 2016.
Homeinns operates more than 2,000 hotels in China under five separate brands in the budget sector including Homeinn, Motel, Yitel and Fairyland brands.
BTG Hotels said it will fund the acquisition through a loan of up to US$1.2 billion from the Industrial and Commercial Bank of China.
Homeinns’ share price initially rose more than 7% on news of the buyout agreement.
