(Yicai Global) Nov. 5 -- Huazhu Group, the firm behind China's Joya, Grand Mercure, and Hanting hotels, has made an EUR700 million (USD778.5 million) bid to purchase Germany's Deutsche Hospitality, the nearly 90-year old owner of Steigenberger Hotels & Resorts and Jaz in the City design hotels, to leverage the high-end European brands at home and abroad.

Huazhu's Singapore arm China Lodging Holding Singapore has penned an agreement to acquire all of Deutsche Hospitality's equity in cash, the Shanghai-based firm said in a statement yesterday. The deal is still pending regulatory approvals.

The price may be altered in the final deal based on working capital, Huazhu insiders told Yicai Global.

Huazhu is upgrading its brand portfolio overseas as China's hospitality sector is becoming more mature and fragmented during an era of giant mergers and acquisitions, Zhao Huanyan, a chief expert at Huamei Consulting, told Yicai Global.

Deutsche Hospitality has a comprehensive brand portfolio from luxury hotels to modern lifestyle ones, and introducing those brands to China will enhance Huazhu's positioning in the high-end market and provide its clients and franchisees with more diversified options, said Ji Qi, founder and executive chairman of Huazhu.

Frankfurt-based Deutsche Hospitality has nearly 120 hotels and 36 are under way in 19 countries on three continents. Earlier this year, the company announced its plan to reach 250 hotels by 2024.

Founded in 2005, Huazhu has more than 5,000 hotels in over 400 cities. The firm entered Japan and Singapore earlier this year.

Huazhu's [NASDAQ: HTHT] share price rose by 1.3 percent to USD38.50 yesterday. 

Editor: Tang Shihua, Emmi Laine