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ACCC green lights $1.2 billion merger between Accor and Mantra

The Australian Competition and Consumer Commission has cleared the path for the $1.2 billion acquisition of Mantra Group by European hotel giant Accor to create Australia's dominant hotel and resort operator.

The deal will create a hotel chain with about 15 per cent of the local hotel market offering around 370 hotels, 53,000 rooms and a dozen brands.

The ACCC said it would not oppose the merger which is expected to be completed in May.

The competition regulator said there was a distinctive lack of overlap between the two businesses with Accor's business being "mainly focused on hotel-style accommodation" through brands like Sofitel, Novotel and Mercure while "Mantra's focus is on serviced apartments" with brands including Breakfree, Peppers and the recently acquired Art Series hotels.

The ACCC also pointed to the growth of the unregulated, "shadow" accommodation sector, led by Airbnb, which has intensified competition, making it harder for hotels to lift their rates during peak periods.

“The combined Accor-Mantra will still compete with other international and national hotel chains, as well as many independent hotels and accommodation providers," ACCC chairman Rod Sims said. 

While there had been speculation that the ACCC would tell the two hotel groups to dispose of some of their hotels in regions where they may have more market power, such as Queensland, Mr Sims said the regulator did not see this as a problem.

“The combined Accor-Mantra will have a large number of properties in some areas, particularly in certain holiday destinations in Queensland," Mr Sims said.

"However, in each case and after a detailed review the ACCC has found that there are also sufficient other options nearby for visitors which will provide competition to Accor-Mantra.”

The deal still requires 75 per cent approval from Mantra shareholders and approval from the Federal Court as well as the Foreign Investment Review Board.


Leon Getler 12th March