Hyatt Hotels will buy Playa Hotels & Resorts for about $2.6 billion (€2.5 billion) including debt, the company said on Monday, seeking to boost its presence in Mexico and the Caribbean.
Interest in upscale and luxury offerings outside the US is climbing as more Americans look to travel overseas to take advantage of a stronger dollar.
Playa operates 24 high-end, all-inclusive resorts across Mexico, Jamaica and the Dominican Republic.
Hyatt has offered $13.50 per Playa share held, representing a 40.5% premium to the stock's close on December 20, before the companies announced their deal talks. Playa's shares were up 2%, while Hyatt was flat.
The US hospitality chain, which owns a 9.4% stake in Playa, expects the deal to close later this year.
Hyatt said it would identify third-party buyers for Playa's owned properties and expects to gain at least $2 billion from the sale of assets by 2027.
This is part of Hyatt's asset-light business model, where the operator prefers not to own physical properties but to manage or franchise them.
"Recycling the owned real estate... and retaining management contracts on the hotels should be highly accretive, but also requires time and incremental cost," Jefferies analyst David Katz said.
"Although we do not anticipate regulatory complexities, the process and time to closing also presents incremental, albeit modest risk," he added.
Playa's portfolio also comprises resorts for rivals such as Hilton Worldwide, Marriott International, Wyndham and UK-based InterContinental Hotels Group's Kimpton brand.
An unknown is if Hyatt can convert non-Hyatt flagged hotels to Hyatt hotels, should it sell these properties, Truist Securities analyst Patrick Scholes said.
