India’s biggest hotel company is buying a European rival in its bid to become the global market leader.
OYO is paying €369.5 million ($415 million) for @Leisure Group, based in Amsterdam, according to sources familiar with the transaction. German media company Axel Springer said in a statement it would receive €180 million ($202 million) for its 51% stake. The deal is expected to close in June this year.
The European vacation rental group operates more than 30,000 holiday homes in 13 countries, and another 85,000 properties across 50 countries under a subscription-based home management service.
OYO said in a statement that the acquisition will help achieve its goal of “becoming a global real estate brand while maintaining leadership in the hospitality industry.”
It also increases OYO’s presence in the short-term home rental space led by Airbnb, which reportedly poured as much as $200 million into the Indian company last month. The startup was valued at $5 billion in 2018, and counts Japan’s SoftBank (SFBTF) as one of its biggest investors.
OYO, which started five years ago as a platform to book budget hotels in India, has nearly half a million rooms across eight countries including China, Malaysia, Indonesia and the United Kingdom. It claims to be one of the top five hospitality chains in China, where it has more than 5,000 hotels in 280 cities.
Headquartered in Gurgaon, a tech hub on the outskirts of Delhi, OYO says it is growing faster than the world’s top three hotel chains combined and aims to have more rooms than global leader Marriott (MAR) by 2023.
Marriott is also wading into the home rental industry, unveiling a new Airbnb-like service called Homes and Villas by Marriott International earlier this week.