Louis Vuitton (LVMUY) Bags in Luxury Hotel Group Belmond (BEL, $17.65)

French luxury goods group, Louis Vuitton Moet Hennessy (LVMH), on Friday announced it has agreed to acquire Belmond Ltd., a London-based owner and operator of high-end hotels around the world.

LVMH has agreed to pay $25 a share in cash for Belmond, a 40% premium over its’ Thursday closing price. The deal, which is expected to close in the first half of 2019, valued Belmond’s equity at around $2.6 billion and the group, including debt, at $3.2 billion.

The Paris-based luxury-goods company, LVMH, which owns fashion brands like Fendi and Louis Vuitton and champagne maker Dom Pérignon, emerged as a surprising winner in a highly competitive bidding process which was majorly dominated by the Middle Eastern and Asian government funds, big hotel brands and private-equity firms.

Belmond, who owns, partly owns or manages 46 luxury hotels, restaurants, train and river cruise properties, posted $140 million in EBIDTA out of $572 million in revenue in the 12-month period ending on Sept 30, 2018.

For the industry, this deal comes as a good omen that luxury travel is finally booming again after an extended downturn, when many leisure travelers and businesses shunned paying up for high-end accommodations.

For LVMH, the acquisition of Belmond further enhances it footprint in the luxury world along with greatly boosting its position in the hospitality business.