Louvre picks up majority stake in Sarovar

Two existing overseas investors have exited Sarovar by selling their entire 30% stake to Louvre

The underserved hospitality sector in India continues to attract new players. Louvre Hotels, Europe's second biggest hotel group, has picked up a majority stake in Indian hotel management company Sarovar for an undisclosed amount. 

Two existing overseas financial investors- Bessemer Venture Partners Trust and New Vernon Private Equity- have exited Sarovar by selling their entire 30% stake to Louvre. 

The Indian promoters, who held 70% stake, have also offloaded more than 20% part of their shares. Avendus Capital was the advisor for the transaction. The value of transaction was not disclosed.

"Our desire to get better reach and distribution globally and bring improved technologies to our hotels led to this arrangement. This will increase our negotiating power with online travel companies," said Ajay K Bakaya, promoter and executive director at Sarovar, which manages 75 hotels, mostly in India. The company has a pipeline of over 20 hotels. The two investors have exited happier, he added.

Louvre, which has a network of 1,175 hotels globally, entered the Indian market in 2007 under the Golden Tulip brand and manages 22 hotels. Louvre and Sarovar together will have a network of 97 hotels, which makes them one of the leading hotel companies in the country.

There will be no change in management of the Sarovar Group and the existing management team led by Sarovar's executive chairman Anil Madhok and Ajay Bakaya will continue to manage the hotels under its brands. Both hotel groups share the desire to continue the development of Sarovar brands.

The two companies said the two groups will benefit immediately from such synergies including local and international management expertise, worldwide distribution, loyalty programs, sales and marketing initiatives, and procurement services while continuing to benefit from the experience of the local management.