Mergers and acquisitions seem to be the new flavor for the hotel industry, judging by the growing number of deals involving Chinese companies this year, industry sources said on Thursday.

Shanghai-based Jin Jiang International Holdings Co Ltd is the latest Chinese hotelier to jump on the overseas M&A trail after it said it was buying Groupe du Louvre and its 100 percent indirect subsidiary Louvre Hotels Group from the US-based private investment firm Starwood Capital Group for an undisclosed amount.

The proposed transaction is subject to the "information and consultation" process with Louvre Hotels Group's central works council, the company said in a statement. The transaction is likely to be completed in the first quarter of 2015 and will be conducted through Star SDL Investment Co, a Starwood affiliate.

Louvre Hotels Group is the second-largest hotel group in Europe, with a network of more than 1,100 hotels, with over 90,000 rooms, in more than 40 countries. Starwood Capital Group acquired it for $3.2 billion in 2005, at which time the latter was named Societe du Louvre.

According to sources, based on Louvre Hotels Group's annual earnings before interest, tax, depreciation and amortization, which is about 80 million euros ($99 million), the transaction is likely to be around 1 billion euros upon completion.

Barry Sternlicht, chief executive officer of Starwood Capital Group, said that the combination would ensure the continued growth and expansion of all brands of Louvre Hotels Group.

He said the deal will help "capture the strong growth potential that clearly exists in China and, more broadly, in Asia".

As one of the premier hospitality and travel conglomerates in China, Jin Jiang International Holdings has three core businesses - hotel investment and management, travel services and transport, as well as logistics. It owns and operates over 1,700 hotels in 11 countries, including one of Shanghai's landmarks, the 85-year-old Peace Hotel.

Yu Minliang, chairman of Jin Jiang International Holdings, said: "There is strong synergy between Louvre Hotel and Jin Jiang in brand portfolio, geographic footprint and guest base. We are looking forward to working with the management, employees and other stakeholders of Louvre Hotel Group to create larger space for both parties to grow globally."

The Hong Kong-listed Jin Jiang International Hotels (Group) Co, which is a major business unit of Jin Jiang International Holdings, saw its net income soar 222 percent in the first six months of this year to 422 million yuan ($68.9 million). Its share price has surged by 13 percent this year.

Chinese investors have acquired several overseas hotels this year.

Kai Yuan Holdings Ltd acquired Marriot Hotel Champs Elysees in Paris for $467.27 million in June, while Anbang Insurance Group took over the Waldorf Astoria in New York for $1.9 billion in October.

shijing@chinadaily.com.cn

By Shi Jing in Shanghai(China Daily USA)