DLF, India's largest listed property developer, has bought one of the world's premium hotel chains in the latest move by the country's companies to extend their overseas acquisition drive to include top-end luxury brands.
DLF is paying $200m for a controlling stake in Amanresorts. The deal comes at a time when Indian automotive companies Tata Motors and Mahindra & Mahindra are bidding for Ford's luxury Jaguar and Land Rover marques.
Aman charges room rates upwards of $600 per night for its hotels, which are tucked away in spectacular scenery in some of the world's most exotic locations, from Angkor in Cambodia to the Himalayan kingdom of Bhutan.
"We feel it should be part of our strategy to start looking outward," said Rajiv Singh, vice-chairman of DLF. "So if we can partner with managements who are best-in-class then we reap the benefit of observing and learning while we are busy doing our work in India."
The deal is the first significant overseas acquisition by an Indian property developer and extends a record run of offshore mergers and acquisitions by Indian companies this year.
Until recently, however, Indian overseas purchases have mostly been of large industrial companies, such as Tata Steel's $13.6bn takeover of Anglo-Dutch
Now, Indian companies are also increasingly looking to strengthen their global branding, particularly at the luxury end of the market. Such acquisitions tend to be smaller but can provide more "bang for your buck", analysts say.
"The strategy for many Indian companies is to acquire some kind of premium or luxury brand that will give your core business some kind of a shine," said Arvind Singhal, chairman of Technopak, a research and consulting firm. "One is the brand boost. Second is the acquisition of skills."
DLF is buying a 50 per cent stake in Amanresorts from Hong Kong-listed Lee Hing Development and other shareholders in the company. Aman founder Adrian Zecha and management will hold the other 50 per cent.
The group was profitable through 2002 but was badly hurt by subsequent tourism downturns in south-east Asia following the Bali bombing and other disasters in the region. The group lost $14.9m last year.
In spite of the financial losses, analysts say Amanresorts has been revitalised under the management of Mr Zecha. "It recovered its momentum, it strengthened its positioning," said Kevin Murphy, a Bangkok-based hotel industry consultant.
