BERLIN -- Carlson Hotels Worldwide will acquire a 25% interest in its European franchisee, Rezidor SAS Hospitality, pending regulatory approval.

Carlson Hotels Worldwide Executive Vice President Bjorn Gullaksen put it this way: On their 11th anniversary, Rezidor and Carlson decided to get married.

As part of the shareholder agreement, Carlson will obtain the equity from Rezidors parent, SAS Group, in return for renegotiated commercial terms of the parties current master franchise agreement. The deal, which extends that agreement by 20 years to 2052, is expected to close in the first half of the year.

Rezidor currently manages several Carlson brands in Europe, the Middle East and Africa, including Radisson (as Radisson SAS), Park Inn, Regent International Hotels and Country Inns & Suites.

Excluded are the Park Plaza and the Radisson Edwardian London. Likewise, the Rezidor brand Cerruti is not included in the agreement.

The new arrangement precludes Rezidor from managing other hospitality companies brands and bars Carlson from using other management companies for the four brands covered by the agreement. But each is free to develop other brands.

The relationship between Rezidor and Carlson has had its ups and downs. In 2001, when Rezidor CEO Kurt Ritter told Travel Weekly that he was going to open some three-star properties, he said he was negotiating with two potential U.S. partners, and pointedly added, I can tell you this: It wont be [with] Radisson.

A year later, Ritter signed a 10-year pact that added three Carlson brands in addition to Radisson. That pact was subsequently extended to 2032.

When the companies signed their first agreement in 1994, there were 29 hotels in the group. Today there are 245 open or under development in 47 countries. The companies success necessitated a reformulation of arrangements, Ritter told at the ITB conference in Berlin.

From the beginning, the deal didnt have a vision to match how the product was going to develop, he said. We became too big too quickly, and things became out of balance.

Ritter said that, since 2001, he has been pleased with his relationship with Carlson and hopes the new agreement will kill the rumors from analysts.

Ritter would not say whether Rezidor SAS Hospitality received cash as part of the agreement, but he said cash was not the motivator. The companies have said they plan to grow the portfolio to 700 hotels by 2012.

As for Carlsons motivation, a spokesman acknowledged that there were several reasons driving the decision, some of them strategic. What if they sold to somebody evil? said Tom Polski, Carlson Hospitality Worldwides vice president.

He also said the old relationship was not appropriate for the current situation. The size of our relationship, with this many hotels, was simply out of proportion [with the terms of the old arrangement].

Polski said Carlson hopes to develop brands with Rezidor, including a lifestyle brand.

To contact Editor-in-Chief Arnie Weissmann, send e-mail to [email protected].

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