Home News and Events Jin Jiang to acquire budget hotel company
Jin Jiang to acquire budget hotel company
SHANGHAI, Sep 27, 2010 (SinoCast Daily Business Beat via COMTEX) -- Shanghai Jinjiang International Hotels Development Co. (600754.SH) said in an announcement that it is to acquire Shanxi-based Goldmet Inn via a subsidiary, thus marking the start-up of the listed company's M&A activity.

Pursuant to the agreement between the parent of Goldmet Inn and the subsidiary of Jinjiang International Hotels, the Shanghai-based chain hotel operator is to acquire 40% of the target's additional registered capital at a cost of CNY 76.6 million. After the move, the registered capital of Goldmet Inn will be enlarged to CNY 68.3 million, with Jinjiang International Hotels taking a 70% stake indirectly. Also, the buyer will have the right to decide whether to purchase the remaining 30% stake of Goldmet Inn in three years. By the end of this June, Goldmet Inn had 11 regular budget hotels in Taiyuan, the capital city of Shanxi Province.

As early as 1997, China's first budget hotel Jinjiang Inn had made debut. By the end of this June, Jinjiang Inn as the budget hotel chain operator ran 369 budget hotels across the country, less than the 674 ones of Home Inns, another budget hotel chain operator of China's Mainland.

As the main business unit of Jinjiang International Hotels, Jinjiang Inn aims to boost the future expansion by setting the goal of opening more than 1,000 Jinjiang Inn-branded budget hotels in the coming three to five years. Also, the hotel operator is finding M&A opportunities. Years ago, the brand of Top Star Hotel had been rumored to be acquired by Jinjiang Inn, but eventually, it was Home Inns that bought Top Star Hotel at a cost of CNY 340 million.

This time's Goldmet Inn actually takes a dominant position in Shanxi's budget hotel market and Jinjiang International Hotels is understood to be attracted by the good quality, the operation performance and the brand recognition of Goldmet Inn. Starting operation in 2006, Goldmet Inn last year achieved the pre-tax profits of over CNY 10 million.

As for the incentive and training mechanism of Jinjiang Inn, Jinjiang International Hotels as the parent company is making specific plans, to enable the top management to benefit much. Two training departments have been set up for Jinjiang Inn, providing the management training and the operation training respectively, with the former mainly for the management team and the latter mainly for the ordinary employees. Employees' treatment will be directly connected with the training evaluation for all chain hotels of Jinjiang Inn brand.