FRANKFURT, May 27 (Reuters) - Holiday company TUI Group on Thursday said it has agreed to sell its 49% stake in Spain’s RIU Hotels SA to co-owner RIU-Group in a deal giving the joint venture an enterprise value of 1.5 billion euros ($1.8 billion).
TUI said the expected net cash consideration for the sale stands at 540 million euros, adding that including an earn-out-element - payable once RIU Hotels SA delivers its budgets for 2022 and 2023 - it would grow to 670 million euros.
The transaction, which TUI said will generate a considerable book gain, is expected to be completed in late summer 2021. Proceeds will be used to cut debt which increased significantly during the Corona pandemic.
TUI said a separate and long-standing 50/50 hotel joint venture with RIU - including 100 hotels and resorts around the world - would be unaffected by the deal. ($1 = 0.8205 euros) (Reporting by Christoph Steitz Editing by Chris Reese)