Starwood Capital is buying Envergure, the second-largest budget hotel chain in Europe, and a stake in luxury hotel group Concorde for £2b.
Envergure has 900 hotels across Europe, including budget brands Campanile and Premiere Classe and its mid-market chains Kyriad and Bleu Marine.
Barry Sternlicht, founder of Starwood Capital Group (SCG), the property investment arm of Starwood Hotels and Resorts, said: "We intend to find growth in the development of budget hotels in France and in emerging markets."
In the same deal, SCG has brought Champagne house Taittinger, which has a 44% stake in Socit du Louvre, which owns Concorde.
- Starwood Hotels & Resorts' proposal with SCG and investment bank Lehman Bros to acquire 23 of Le Meridien's 35 hotels has been given the go-ahead by the European Commission. All 35 properties will be sold to Newco - a joint venture between SCG and Lehman Brothers - and will be managed by Starwood Hotels & Resorts.