Oyo, India's startup giant, makes a groundbreaking move by acquiring G6 Hospitality, the operator of Motel 6, in a $525 million all-cash deal with Blackstone Real Estate. This strategic acquisition, which includes the Studio 6 extended stay brand, is set to close in the fourth quarter of this year.
With Oyo's first U.S. location opening in 2019, the company now manages over 320 hotels across 35 states. By adding Motel 6 to its portfolio, Oyo is significantly expanding its presence in North America, tapping into the well-established budget hotel brand's network of around 1,500 locations in the U.S. and Canada.
"This acquisition is a game-changer for us to enhance our global footprint," stated Oyo International CEO Gautum Swaroop. He reassured that Motel 6 will continue to operate independently despite the merger.
Founded in 2012 and backed by SoftBank, Oyo faced challenges during the pandemic and received backlash for questionable business practices. Despite being valued at $10 billion in 2019, the company's worth plummeted to $2.5 billion in a recent funding round, sparking concerns about its financial stability.
On the other hand, Motel 6, established in 1962, revolutionized the budget hotel industry with its $6 nightly rates and was acquired by Blackstone for $1.9 billion in 2012.
In conclusion, Oyo's acquisition of G6 Hospitality marks a significant milestone in the company's journey, but it also raises questions about its financial health and long-term sustainability. Investors and consumers alike should monitor the developments closely to assess the impact on the hospitality industry and their own financial decisions.