Merger interest boosts shares of hoteliers Accor, IHG

Shares of France's Accor went up 1.9 percent on Thursday following reports of a potential merger with UK's InterContinental Hotels that would form the world's biggest hotel group with a market value of about $17 billion.

A merger would result in a combined 1.6 million rooms, propelling them way ahead of US-based Marriott.

It could also make geographical sense, with Accor and its brands more skewed towards Europe, while IHG has larger operations in the United States and is also growing fast in Greater China.

According to the Le Figaro newspaper, no formal approach had been made by Accor, but Accor, its chairman and CEO Sebastien Bazin reportedly set up an internal task force to examine the possibility of a merger.

Le Figaro added that Accor's management board favored the deal, but Bazin was cautious about moving ahead.

Accor owns such brands such as Ibis and Movenpick, while IHG in the company behind the likes of Holiday Inn and Crowne Plaza.

Accor faces higher interest payments after being downgraded to junk status by S&P Global earlier this week that pulled its shares down over 43 percent so far.

Shares in IHG went down around 23 percent this year.

Both firms have announced cost-savings plans, including job cuts, to cope with the pandemic's effects.