InterContinental Hotels Group announced on Wednesday that it will buy a 51 per cent stake in Regent Hotels and Resorts for US$39 million in cash, a move that would accelerate its expansion in the luxury hotel segment.

The group will pay for the majority stake in three US$13 million tranches, the first upon the date of completion, the second in 2021 and the last in 2024. It also has the option to acquire the remaining 49 per cent interest – valued at US$100 million – in a phased manner from 2026.

IHG said it would fund the Regent purchase with existing capital.

The acquisition, the group said, was one of its new strategic initiatives focused on increasing its footprint in the fast-growing US$60 billion luxury segment. IHG owns InterContinental Hotels & Resorts, one of the world’s largest luxury hotel brands, among others that included the Crowne Plaza Hotels & Resorts and Holiday Inn.

In Hong Kong, the InterContinental Hong Kong will be transformed into a Regent hotel in early 2021 after a refurbishment that will commence in early 2020. The hotel first opened its doors in 1980 as the Regent and became one of the city’s iconic hotels.

“As one of the pioneers in defining luxury hotels both in Asia and around the world, Regent is an excellent addition to IHG’s portfolio of brands,” said IHG chief executive Keith Barr in a statement.

“We see a real opportunity to unlock Regent’s enormous potential and accelerate its growth globally.”

IHG said it expected to grow the brand to more than 10,000 rooms, or 40 hotels, over the long term. Regent currently has six hotels, with three more in the pipeline.

The transaction is expected to close in the second quarter of this year.

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