It will now be Reliance Industries catering to your needs when you fine dine at The Trident or lay back in the lap of luxury at The Oberoi Hotel. Reliance Industries Limited, led by Mukesh Ambani, Asias richest man, announced that it had bought a 14.12 per cent stake in EIH Limited, which owns and manages several hotels in the country including the Oberoi and The Trident brands.
The acquisition was made through RIL’s wholly-owned subsidiary Reliance Industries Investment and Holding Private Limited from Oberoi Hotels Private Limited and certain other promoters of EIH Limited a statement from the company said.
“RIL’s investment in EIH Limited has been made as the Oberoi family had developed the ‘Oberoi Hotels’ brand into a premier international brand in the luxury hospitality sector and as a result EIH Limited has excellent future prospects,” the statement added.
The entire deal has set back RIL by a whooping Rs. 1,021 Crores. But knowing Reliance, one cannot be surprised at the enormity of the figures the deal has witnessed. Reliance is a very diverse and flexible company, a fact which is again proven by the mentioned deal.
In a statement, RIL said that the investment in EIH Limited had been made as the Oberoi family had developed the Oberoi Hotels brand into a premier international brand in the luxury hospitality sector. The company noted that EIH Limited has excellent future prospects. The statement also said that there would be no change of management, operation or control of EIH Limited.
RIL is likely to get one seat on the board of EIH Limited for its stake. Sources said that there was no immediate plan for an open offer. Sources also confirmed that this was a strategic investment and probably the first step for the petrochemical major to enter the hospitality segment.
Now with Mr. Ambani investing aggressively in the hospitality business, it would be interesting to know whether his competitors follow lead and this inception triggers a series of aggressive investments mounting to huge amounts. Only time will tell what is in store. But for the moment, its Reliance at your service.