The planned acquisition of Island Hotels Group by Corinthia’s IHI is a first for Malta in many ways. It is almost certainly the largest such transaction between private companies in Malta and it is also the first between publicly listed companies.

But it is also remarkable as it involves two family businesses. Both Corinthia and Island Hotels were started a few decades ago by men of vision. Corinthia’s stellar expansion within Malta and overseas is in a league of its own, not just compared with Island Hotels Group, but also compared with other hotel companies. But Island Hotels also built up a respectable and respected portfolio of activities.

Both groups owe much of their success to their ability to make changes without sentimentality: Corinthia closed Jerma Palace and Mistra; Island Hotels sold Buġibba Holiday Complex and the Coastline Hotel.

Both have handled succession smoothly – and again, without sentimentality. Corinthia appointed a non-family member as CEO; Island Hotels found a formula to keep the siblings of the second generation involved and cut ties with one of the founding shareholders.

The groups’ corporate governance is sound and their public listing brought credibility and accountability. They both think big, whether Corinthia with its superlative hotel in London or Island Hotels with its plans for the Costa Coffee brand and concession for Ħal Ferħ.

And yet, the decision to sell Island Hotels to IHI was still a surprise for many in the business community.

The interview with Winston Zahra Jr in this edition of the Business Observer answers some of the questions – but not all. IHI clearly got a fairly good deal, with much of Island Hotels’ value yet to materialise, for a fairly good price.

It also got an area in St George’s Bay which will allow its six-star dreams for the site to take shape. But why did Island Hotels not just sell the Radisson St Julians? Why did it sell its catering arm when Corinthia is a partner in its biggest competitor – Catermax? Why did it sell the Radisson Golden Sands, which has such a successful business model based on prepaid timeshare? Why did it sell its share in the Costa Coffee roll-out and the potential eye-opener that Ħal Ferħ could one day be, with or without an adjacent golf course?

But that is not the question that is uppermost in people’s minds. The question is why would Winston Zahra Jr, a man in his 40s, prefer not to continue building his own empire? It does not matter that the Island Hotels Group will now get a ride on the Corinthia kite. It does not matter that the acquisition will enable the Island Hotels Group to grow two, three or four times as fast.

The question is: why his ego did not trump his business acumen? Even if the deal made sense commercially, family businesses in Malta are rarely able to take such pragmatic decisions. Joe Gasan was a trailblazer when he merged with competitors in both insurance and car dealerships – but few have followed.

The Sunday Times of Malta (January 25) carried an article about PwC’s survey of family businesses. The global survey includes a quote from one of the interviewees which says: “Family businesses generally fail for family reasons”.

The challenges facing family businesses in Malta are no different to those anywhere else. Being able to take bold – and painful – decisions without sentimentality is a skill others would be wise to consider.