Bermudian-domiciled high-end hotel operator Belmond Ltd is to be bought out by French luxury giant LVMH in a deal worth $2.6 billion.

Belmond’s shares surged by nearly 40 per cent in New York Stock Exchange trading on Friday after the news was announced to a close to the LVMH’s $25-a-share offer price.

Belmond is the owner of New York’s “21” Club and high-end resorts around the world. The transaction is LVMH’s largest since taking full control of Christian Dior for more than $7 billion last year and pushes the company further into services amid rising concern about the sustainability of the Chinese demand that’s driven fashion industry growth.

The acquisition is one of LVMH founder Bernard Arnault’s biggest, rivalling the purchases of Bulgari and Loro Piana. It comes as consumers shift spending towards trips, health clubs, restaurants and entertainment and interest in shopping malls dwindles.

Belmond, which used to be known as Orient-Express Hotels, owns or has stakes in more than 30 high-end hotels around the world, from St Petersburg to Anguilla in the Caribbean. In addition to the ‘21’ Club power restaurant in Manhattan, its stable of luxury properties includes a cruise line in France, a London-to-Venice train line and safari camps in Botswana.

The deal will expand the French company’s high-end hospitality offerings. LVMH formed a hotel management group in 2010 to oversee its operations in the sector, which include properties under the Cheval Blanc name in locations like the Courchevel ski resort in the French Alps.

LVMH’s Bulgari jewellery brand has six hotels, including one in Shanghai that opened in July. It plans to open hotels in Moscow, Paris and Tokyo in the next four years.

Aside from the deal for the rest of Christian Dior, which LVMH already controlled, the French conglomerate had been relatively quiet on the mergers-and-acquisitions front since buying German suitcase maker Rimowa in 2016.

The agreement ends a four-month sale process as Belmond has sought to take advantage of a strong hospitality market. The company said in August it hired Goldman Sachs Group and JPMorgan Chase & Co for a strategic review. Analysts speculated a sale could involve breaking up the company’s assets, since its properties could be of value as trophies for ultra-wealthy investors including sultans and oligarchs.

LVMH is a surprise winner for Belmond. Among those weighing an offer for all or part of the company were KSL Capital Partners, Blackstone Group, KKR & Co and Ashkenazy Acquisition, people familiar with the matter told Bloomberg in October.