Oyo, one of India’s largest startups, has agreed to purchase G6 Hospitality, the operator of Motel 6, for $525 million in an all-cash transaction. The deal, which also includes G6’s Studio 6 extended stay brand, is expected to close in the fourth quarter of this year. Blackstone Real Estate, the current owner of G6 Hospitality, will be selling its stake to Oyo.

The acquisition marks a significant expansion for Oyo, which currently operates over 320 hotels across 35 states in the U.S. Since entering the American market in 2019, Oyo has grown its footprint, and this latest deal will substantially increase its presence in North America. Motel 6, known for its budget-friendly model and large franchise network of approximately 1,500 locations across the U.S. and Canada, is considered one of the most recognized motel brands in the region.

Gautum Swaroop, Oyo’s International CEO, highlighted the importance of this acquisition for the company’s international growth. He confirmed that Motel 6 will continue to operate as a separate entity under Oyo’s ownership. This move aligns with Oyo’s broader efforts to strengthen its global presence, despite facing financial challenges in recent years.

Oyo, which was valued at $10 billion in 2019, faced significant setbacks during the pandemic and has been criticized for some of its business practices. In mid-2023, reports surfaced that its valuation had dropped to $2.5 billion during a new funding round — a figure Oyo has denied.

Motel 6, founded in 1962, pioneered the concept of budget motels, originally offering rooms for $6 a night. It was acquired by Blackstone in 2012 for $1.9 billion.