Bottom line: HNA’s $6.5 billion investment in Hilton marks a new high point in Chinese global hotel buying, and signals the trend may be cresting and a downturn could come next year.
HNA invests in Hilton
After I said just last week that China’s recent buying binge of foreign hotels may have crested, we’re seeing yet another blockbuster deal that seems to support that thesis. This latest deal is the biggest to date, and has the acquisitive HNA Group buying 25 percent of US hotel giant Hilton (NYSE: HLT) for about $6.5 billion. That would easily eclipse the other recent blockbuster deal announced just last week, when insurance giant China LIfe (HKEx: 2628; Shanghai: 601628; NYSE: LFC) said it was leading a Chinese group that would invest $2 billion in a portfolio of lower-end US hotels. (previous post) Read Full Post…
Bottom line: Jin Jiang’s $260 million investment in WeWork is part of the Chinese company’s global expansion, and could see the pair work together to accelerate a move of the shared office concept into China.
Shared office specialist gets backing from Jin Jiang
After getting a chilly reception in the US and France, Chinese companies eager to buy western hotel brands may be taking a different approach in their bid to go global. That appears to be the bottom line in a new move by state-run Chinese hotel giant Jin Jiang (HKEx: 2006; Shanghai: 600754), which has reportedly just invested $260 million in US shared office space operator WeWork.
Foreign hotels have become a flavor of the day for Chinese buyers looking to expand beyond their home market and import foreign expertise to improve their own operations. In addition to brands, Chinese companies have also developed a taste for big-name foreign hotels, led by the purchase of New York’s storied Waldorf Astoria by state-owned Chinese insurer Anbang nearly 2 years ago for an eye-popping price of nearly $2 billion. Read Full Post…
Bottom line: Postal Savings Bank’s IPO is likely to price weakly and make a flat trading debut due to waning enthusiasm, while Anbang could make a similarly large IPO next year that will get an equally tepid reception.
Anbang eyes HK IPO
The world’s biggest IPO in 2 years is quickly running out of steam, with word that a Hong Kong listing by Postal Savings Bank of China, the nation’s last national bank to list, is set to price near the bottom of its range. Meantime, what could easily become one of next year’s biggest offering has just popped into the headlines, as insurance giant Anbang is saying in one of its first-ever foreign media interviews that it wants to make its own listing, also in Hong Kong. Read Full Post…
Bottom line: China’s anti-trust regulator is moving cautiously in approving the Marriott-Starwood merger because it involves 2 major global brands with a big presence in the high end of the market, but will ultimately approve the deal.
China extends anti-trust review for Marriott-Starwood merger
China is once again creating problems for an offshore M&A deal that would create the world’s largest hotel company, with word that it’s extending an anti-trust review period for the landmark merger of US hotel giants Marriott (NYSE: MAR) and Starwood (NYSE: HOT). Industry watchers got some brief entertainment earlier this year when Chinese insurer Anbang sparked a bidding war with its surprising offer for Starwood, operator of the Sheraton and Westin brands that had already agreed to be acquired by Marriott. Anbang later dropped that bid, but now more delays are coming from China, where the anti-trust regulator says it needs more time to review the deal. Read Full Post…
The following press releases and news reports about China companies were carried on August 10. To view a full article or story, click on the link next to the headline.
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HTC (Taipei: 2498), Alicloud Form Strategic Alliance in Virtual Reality (Chinese article)
Sina (Nasdaq: SINA) Reports Q2 Financial Results (PRNewswire)
China Extends Marriott-Starwood Deal Review by Up to 60 Days (English article)
BP (London: BP) Seeks Buyers for Its Half of China Petrochemical JV (English article)
China Film (Shanghai: 600977) Rises 44 Pct in Shanghai Trading Debut (Chinese article)
Bottom line: Beijing regulators should take a more hands-off approach to outbound M&A by major institutional buyers like Anbang, and let them take more direct responsibility for their investment decisions.
Anbang targeting InnVest?
A new showdown could be brewing between Beijing and China’s newly minted field of outbound investors, as reports emerged last week that insurer Anbang was planning a major new Canadian acquisition less than 2 months after China’s insurance regulator reportedly vetoed a previous similar plan. The latest deal would see Anbang buy InnVest Real Estate Investment Trust (Toronto: INN-UN), one of Canada’s largest hotel owners, following its failed bid in March to buy US hotel giant Starwood (NYSE: HOT), operator of the Westin and Sheraton brands. Read Full Post…
Bottom line: Major new hotel acquisitions by HNA Group and Jin Jiang reflect a recent wave of domestic consolidation and global hotel buying by Chinese companies, and could culminate with a Jin Jiang bid for France’s Accor.
Jin Jiang buys Vienna Hotels
Two of China’s biggest acquirers from the travel sector are in the headlines today, both with very European-sounding investments. The larger of those will see HNA Group, parent of Hainan Airlines (Shanghai: 600221), purchase the Belgium-based owner of the Radisson hotel brand. The other will see Shanghai-based hotel operator Jin Jiang (HKEx: 2006; Shanghai: 600754) buy 80 percent of Vienna Hotels Group, a European-sounding name that is actually just a Chinese operator based in the southern boomtown of Shenzhen.
Both deals reflect a recent Chinese appetite for global hotel companies, including property owners and management firms. That appetite was on prominent display last month, when insurance company Anbang got in a heated bidding war for US-based Starwood (NYSE: HOT), owner of the Sheraton and Westin brands. Anbang bid aggressively against US operator Marriott (NYSE: MAR) in that battle, but ultimately bowed out under pressure from China’s insurance regulator. (previous post) Read Full Post…
Bottom line: Jin Jiang is likely to ultimately drop its pursuit of Accor and sell its entire stake in the French hotelier, which is showing signs of growing uneasiness in an unwanted courtship by its Chinese suitor.
Jin Jiang contemplates upping its Accor stake
Leading Chinese hotelier Jin Jiang (HKEx: 2006; Shanghai: 600754) and worldwide peer Accor (Paris: AC) are becoming increasingly uncomfortable bed mates, with word that the former may want to boost its stake in the latter. This particular alliance was engineered by the state-run Jin Jiang, which early this year acquired 5.5 percent of Accor by purchasing shares of the French hotel operator in the open market. Jin Jiang later upped that stake to nearly 12 percent, though again it’s not clear if it bought the shares with the approval of Accor, operator of the upscale Novotel and Sofitel brands.
The history of this relationship, combined with overtones in the latest reports, all hint at an uneasy courtship that is taking place between these 2 companies. Jin Jiang is clearly interested in Accor’s global background and expertise, as it embarks on a recent buying spree in an attempt to build China’s first worldwide hotel company. But Accor seems far less interested in being pursued by Jin Jiang, probably because its suitor is an unfamiliar company with very little experience running a global brand. Read Full Post…
Bottom line: A veto threat by China’s insurance regulator ultimately killed Anbang’s bid for Starwood, but the Chinese insurer is likely to pursue more mega-purchases in the more traditional overseas real estate sector this year.
Starwood abandoned at altar by Anbang
In a sudden and unexpected turn in the bidding war for hotelier Starwood (NYSE: HOT), Chinese suitor Anbang has suddenly bowed out of the contest without explanation, paving the way for a merger with US suitor Marriott (NYSE: MAR). Many are marveling at this sudden turn of events, since Anbang earlier this week had submitted an all-cash bid that was 6 percent higher than Marriott’s latest offer for Starwood, operator of the Sheraton and Westin hotel brands.
But anyone in China might say they saw this coming, based on a couple of local media reports from sources at Anbang and China’s insurance regulator. The first of those reports came last week, and saw one of China’s top financial media report that the Chinese insurance regulator was likely to veto a deal over concerns about the size of the investment. That was followed by another report based on comments from an Anbang insider this week, saying the regulator would have no grounds to veto such a deal. Read Full Post…
The following press releases and news reports about China companies were carried on April 1. To view a full article or story, click on the link next to the headline.
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Bottom line: Marriott stands a 60-40 chance of having its bid for Starwood approved at an April 8 shareholder vote, since a competing Anbang proposal could face the strong possibility of rejection by China’s insurance regulator.
Anbang confident of Beijing will approve Starwood bid
A series of new reports and data on Chinese insurer Anbang are showing why the company is confident it can get regulatory approval from Beijing in its heated bidding war for Starwood (NYSE: HOT), operator of the Sheraton and Westin hotel brands. I also expect that the US regulator would have little or no reason to veto such a deal on national security grounds, since Starwood really doesn’t handle any sensitive information as hotel operator.
Thus from a regulatory perspective, if the latest Chinese reports are correct, it does look like Anbang would be able to get the necessary regulatory approval from both Washington and Beijing to buy Starwood for $14 billion in its ongoing bidding war with Marriott (NYSE: MAR). But the reports coming from China are quite contradictory, reflecting a potential looming clash between Anbang and China’s conservative insurance regulator. Read Full Post…
