Travel & hospitality company Stella Group announced a substantial expansion into Africa, with the acquisition of South Africa-based Protea Hotels -

The deal is valued at ZAR1.48-billion, or A$255-million.

Protea is Africa's largest hotel management company, operating 126 hotels in 13 countries. The properties include seaside resorts, country hotels, mountain retreats, private game reserves and city centre hotels. The company is being acquired as a going concern.

"As the leading independent hotel management group in Africa, Protea Hotels is an excellent acquisition for Stella Group, rounding out an important geographic region in the division's international profile," said Rolf Krecklenberg, Managing Director of Stella Group.

"When the transaction is complete, Stella Group will be a travel services provider across Australia, New Zealand and Africa and will have broad exposure to Europe through a significant shareholding in Golden Tulip Hospitality Group, one of the world's largest hotel operators."

Protea Chairman Otto Stehlik and Managing Director Arthur Gillis said they were delighted that Protea would become part of a rapidly growing and geographically diverse business with excellent brands and a reputation for quality and service.

"Through the Stella Group's wide reach in Australia and New Zealand and its strategic investment in the Golden Tulip chain in Europe, this deal secures Protea's future outside of Africa as part of an established, global leader in the tourism and hospitality industry," Mr Stehlik said.

Mr Gillis said the acquisition would allow the Stella Group to take advantage of Protea's competitive and well developed technology, including its acknowledged edge in online marketing and reservation systems. "In turn, we will be able to participate in much of the technology from the Stella Group.

"I'm exceptionally pleased that this acquisition will enable our staff to benefit from this opportunity to grow and be part of our global expansion," he said. "We are also excited about the potential for the Stella Group to leverage Protea's core competencies in brand management, infrastructure, marketing, management expertise, administrative capability and our experience in relationship management."

The Protea acquisition gives the Stella Group more than 9,000 rooms in Africa with a pipeline of more than 3,000 more to come by the end of financial 2008. The Stella Group's existing portfolio comprises approximately 15,000 rooms across the corporate and leisure market in Australia and New Zealand.

As part of the transaction, Stella has secured long-term contracts with Executive Chairman Otto Stehlik, Chief Executive Arthur Gillis and other senior Protea Hotels management.

The acquisition is subject to approval from the South African Reserve Bank and the relevant local competition authorities.

Stella Group has also agreed to sell a significant interest in Protea to the current Black Economic Empowerment (BEE) shareholders in Protea, who will realise 50% of their current investment in Protea while retaining a 26% shareholding in the local company.

The Stella Group is the largest integrated travel group in Australia and New Zealand. It has two distinct divisions; Stella Hospitality Group, the parent for accommodation brands including Mantra, Peppers, balé, BreakFree, Saville and Pacific International Suites; and Stella Travel Group which owns leading travel brands.