July 26, 2018 / 5:34 AM / 3 months ago

AccorHotels drops plan to buy minority stake in Air France-KLM

PARIS, July 26 (Reuters) - AccorHotels, Europe’s largest hotelier, said on Thursday it had decided to drop plans to buy a minority stake in Air France-KLM as it felt that conditions necessary for the deal had not been met at this stage.

Accor made the announcement as it posted a 4.2 percent rise in first-half operating profit, driven by restructuring efforts and robust demand in all key regions, and it predicted a further rise in profits for the full year.

Last month, AccorHotels had said it was looking at taking a minority stake in Air France-KLM to help it compete better against travel packages offered by online rivals such as Expedia and Booking.com.

However, it said it had since decided to abandon that plan.

“AccorHotels remains convinced of the strong potential for value creation of strengthened ties between hoteliers and airline. However, the group considers that conditions for taking a minority stake in Air France-KLM have not been met at this stage and has thus decided not to pursue the study of this project,” the company said in a statement.

Accor, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, said first-half operating profits rose 4.2 percent on a like-for-like basis to 291 million euros ($341.28 million), slightly above the 266 million euros average forecast in a ThomsonReuters I/B/E/S poll.

$1 = 0.8527 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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