What is the fascination that Chinese companies have with U.S. hotel companies? Early this year, China’s Anbang Insurance made a $6.5 billion deal to acquire Strategic Hotels & Resorts, then followed up with a failed attempt to take over Starwood Hotels in a see-saw $14 billion bidding battle against Marriott.
Meanwhile, a unit of the Chinese conglomerate HNA Group last spring arranged with Minneapolis-based Carlson Companies to buy that privately-held firm’s Carlson Hotels business, including several Radisson brands as well as its 51 percent stake in Europe’s Rezidor Hotels Group. The price was not disclosed.
And now HNA Group has anted up $6.5 billion for a 25 percent stake in Hilton Worldwide; the deal is expected to close early next year.
The seller of the 25 percent Hilton stake — for which HNA paid a premium of almost 15 percent over the going price for Hilton shares – was the same firm that sold Strategic Hotels to Anbang: the giant U.S. investment house Blackstone Group, which took Hilton private in 2007 and then took it public with an IPO in 2013 that raised $2.3 billion. (By the way, Anbang also acquired the legendary Waldorf Astoria in New York in 2015 for almost $2 billion.)
The new deal will give HNA two seats on Hilton’s board. Blackstone will retain a 21 percent stake in Hilton Worldwide. HNA Group owns hotels, airlines (including China’s Hainan Airlines), airports, financial services firms and real estate companies.
Meanwhile, Anbang’s purchase of Strategic Hotels hit one little snag. Strategic has just 16 hotels, but they are prime properties like the InterContinental and Fairmont in Chicago, New York’s JW Marriott Essex House, and some Four Seasons and Ritz-Carlton hotels. The group also includes San Diego’s Hotel del Coronado, and Blackstone had to cut that one out of the sale after objections from a U.S. government inter-agency group called the Committee on Foreign Investment in the United States.
The reason? National security concerns, because the del Coronado is right next to a giant U.S. Navy base in San Diego.
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