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  1. #1
    Senior Member JohnDoe2's Avatar
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    Chinese buying up U.S. luxury hotels

    5 things about the Chinese company that's buying up U.S. luxury hotels

    The Hotel del Coronado near San Diego is one of 16 hotels that will reportedly be acquired by Chinese firm Anbang Insurance Group.
    (Don Tormey / Los Angeles Times)



    By Samantha Masunaga and Julie Makinen Contact Reporters


    Chinese investment in U.S. trophy properties is soaring, and Beijing-based Anbang Insurance Group is providing some of the biggest fireworks.

    A consortium led by the insurer has made an unsolicited bid for Starwood Hotels and Resorts Worldwide Inc., according to a statement Monday from Marriott International Inc., which is in the process of acquiring Starwood. Earlier, Anbang was reported to be offering $6.5 billion for hotels that include the Hotel del Coronado near San Diego.


    RELATED: $14-billion bid for Starwood hotels puts Chinese firm Anbang in spotlight >>


    Until a few years ago, Anbang was largely unknown in the U.S. Read on to find out more.


    Anbang is very wealthy


    Anbang, pronounced “ahn-bahn,” got its start in 2004 with $75 million and a single branch in Beijing. Since then, it has steadily increased in value. By 2009, the company had assets of $5.1 billion. Today it is one of the largest insurance groups in China, with $250 billion in assets, 30,000 employees and more than 35 million clients.

    Its early investors were Shanghai Automotive Industry Corp., Chinese oil and gas company Sinopec and other large state-owned enterprises.

    It is well connected


    Some have attributed the company's success to its strong political ties. Chinese media have attempted to publish reports on what power players are involved with Anbang, but some of those reports were taken offline shortly after being posted.

    An investigation by the publication Southern Weekend found that those involved included Zhuo Ran, the granddaughter of China’s former “paramount leader” Deng Xiaoping; Zhu Yunlai, son of former premier Zhu Rongji; and Chen Xiaolu, son of Communist Party revolutionary military commander Chen Yi.


    It is part of a larger wave of interest in U.S. properties


    As China's economy slows, Chinese companies are looking to diversify their assets outside their home market. Even the government has encouraged companies to "go out." U.S. real estate is an especially attractive target since China’s economy was once driven by real estate and the topic is one companies know well, said William Yu, an economist with the UCLA Anderson School of Management.

    Investments in the U.S. are also seen as more stable, as some fear that Chinese currency could depreciate, he said.


    “If they invest in dollar assets, and if dollar assets appreciated, they would have additional gain on overseas investment,” Yu said.


    Anbang likes to make a splash


    Anbang first burst on the U.S. hospitality scene in 2014, when it bought the New York Waldorf-Astoria hotel for $1.95 billion, the second-largest Chinese acquisition of a U.S. hotel on record.

    The company will reportedly pay $6.5 billion to buy Strategic Hotels and Resorts, a portfolio of 16 luxury hotels owned by New York private equity firm Blackstone Group. Its hotels include four Southern California properties: the Hotel del Coronado, the Ritz-Carlton Laguna Niguel, the Montage Laguna Beach and the Loews Santa Monica Beach. Blackstone had just completed its own acquisition of the portfolio in December.


    It will have to fight for Starwood


    Starwood is in the midst of an acquisition by Marriott, a move that would create the world's largest hotel company. The Marriott deal was valued at about $12.2 billion. The acquisition was announced in November, and shareholders from both companies are set to vote on the plan in two weeks.

    The consortium led by Anbang has offered $76 in cash per Starwood share, as well as Interval Leisure Group Inc. common stock valued at about $5.50 per Starwood share.


    Starwood said its board has not changed its recommendation to support the Marriott deal, but that it would “carefully consider” the outcome of discussions with the consortium. Starwood said it got a waiver from Marriott to speak with the consortium about the proposal. The waiver expires on Thursday.


    Wes Golladay, a research analyst with RBC Capital Markets, said Anbang has a “legitimate chance” at buying Starwood because of the high premium it’s willing to pay.


    “They’ve already demonstrated the ability to close a large transaction,” he said, referring to Anbang’s Waldorf-Astoria purchase. “I think it’s definitely going to be looked at very carefully.”


    But he said the Marriott deal comes with less risk since it is already far along in the regulatory process.

    http://www.latimes.com/business/la-f...htmlstory.html
    Last edited by JohnDoe2; 03-14-2016 at 09:19 PM.
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  2. #2
    Senior Member JohnDoe2's Avatar
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    Senior Member JohnDoe2's Avatar
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    Senior Member JohnDoe2's Avatar
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    $14-billion bid for Starwood hotels puts Chinese firm Anbang in spotlight


    Starwood Hotels & Resorts Worldwide Inc. is the owner of Sheraton and St. Regis hotels.
    (Wilfredo Lee / Associated Press)



    Samantha Masunaga and Julie Makinen Contact Reporters

    A $14-billion bid for Starwood Hotels and Resorts Worldwide Inc. surfaced Monday, putting a spotlight on Chinese firm Anbang Insurance Group and complicating a plan to meld Starwood and Marriott International Inc. into the world’s largest hotel company.

    Starwood told Marriott on Friday that it received an unsolicited offer from a consortium led by Anbang, according to a statement released Monday by Marriott.


    Starwood confirmed that it had received a proposal but did not name the lead company in the consortium.


    Anbang appears to be making big plays in the American hotel industry. In 2014, the insurer bought the New York Waldorf-Astoria hotel for $1.95 billion. At the time, the company indicated its interest in making more such deals, saying in a statement that it planned to “realize long-term stable investment return by investing in high quality real properties in North America.”

    On Saturday, there were reports of a $6.5-billion deal under which Anbang would acquire 16 luxury hotels owned by New York private equity firm Blackstone Group.

    The portfolio of hotels includes four Southern California properties: the Hotel del Coronado near San Diego, the Ritz-Carlton Laguna Niguel, the Montage Laguna Beach and the Loews Santa Monica Beach.


    In the bid for Starwood, the hotel firm said, the consortium offered $76 in cash per Starwood share, as well as Interval Leisure Group Inc. common stock valued at about $5.50 per Starwood share.

    In November, Marriott said it would acquire Starwood in a deal valued at about $12.2 billion.

    The new hotel company would have 5,500 hotels and more than 1.1 million rooms in more than 100 countries. Marriott owns brands such as Ritz-Carlton and JW Marriott, and Starwood is known for its St. Regis and Sheraton hotels.


    Starwood and Marriott shareholders are to vote on Marriott’s proposal in two weeks. Marriott said it expected the deal to be completed by mid-2016.


    Starwood said its board of directors has not changed its recommendation to support the Marriott deal but “will carefully consider the outcome of its discussions with the consortium in order to determine the course of action that is in the best interest of Starwood and its stockholders.”

    Marriott said it is “confident” that its deal with Starwood “is the best course for both companies.”


    But Anbang also has motivation to buy.


    As China’s economy slows, Chinese companies are looking to diversify their assets outside their home market. The government has been encouraging companies to “go out.”


    "These are turbulent economic times, and yet we see Chinese companies acting with confidence and continuing to make major moves in Europe and North America," said Michael DeFranco, chairman of the global mergers and acquisitions practice at law firm Baker & McKenzie.


    Even by Chinese standards, Anbang seems to have had a swift rise, apparently helped along the way by its connections to the corridors of power.


    Anbang Insurance was originally Anbang Property Insurance, and its early investors were Shanghai Automotive Industry Corp., Sinopec and other big state-owned enterprises.


    It started with about $75 million in 2004, and its assets reached $5.1 billion in 2009. Now it says that it has 30,000 employees, more than 35 million clients and more than $250 billion in assets, and that it is one of the largest insurance groups in China.


    The insurer has significant stakes in some of China’s largest banks and other companies, including China Merchants Bank, Minsheng Bank, Gemdale Group, real estate developer Wanke, the bank ICBC and Sinohydro Co.


    Chinese media have attempted to publish reports on what power players are involved with Anbang, but some of those reports have been taken offline shortly after being posted.


    An investigation by the publication Southern Weekend found that those involved included Zhuo Ran, the granddaughter of China’s former “paramount leader” Deng Xiaoping; Zhu Yunlai, son of former premier Zhu Rongji; and Chen Xiaolu, son of Communist Party revolutionary military commander Chen Yi.

    http://www.latimes.com/business/la-f...314-story.html
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  5. #5
    Senior Member JohnDoe2's Avatar
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    Unpacking a Chinese Company’s U.S. Hotel Buying Spree

    Andrew Ross Sorkin
    DEALBOOK MARCH 14, 2016



    A Chinese insurance company, Anbang, just over a year ago purchased the Waldorf Astoria Hotel in New York.Credit Waldorf Astoria New York

    When the Japanese began buying trophy properties like Rockefeller Center in the late 1980s, there was an intense reaction.

    David Letterman began his show one evening with the announcer saying, “From New York, a subsidiary of Mitsubishi, it’s ‘Late Night with David Letterman.’ ” A New York Times Op-Ed was titled, “An Economic Pearl Harbor?”


    Even Donald J. Trump got in on the act: “Bidding on a building in New York is an act of futility, because the Japanese will pay more than it’s worth,” he told Playboy in 1990. “They want to own Manhattan.”


    A quarter-century later, it is China’s turn.


    On Monday, in a head-turning series of deals, a Chinese insurance company that just over a year ago purchased the Waldorf Astoria, bought $6.5 billion of properties from the Blackstone Group and made a $10.8 billion offer to buy Starwood Hotels and Resorts Worldwide.


    The collection of brands — Sheraton, Westin, W Hotels, St. Regis — is remarkable. Properties include the Essex House on Central Park South; the Hotel del Coronado near San Diego, where “Some Like it Hot” was filmed; the Ritz-Carlton, Laguna Niguel and a smattering of Four Seasons and Fairmont properties.

    When the insurer, Anbang, purchased the Waldorf in 2014, there was concern that the historic hotel — where the United States ambassador to the United Nations resides — had fallen into the hands of a Chinese company.

    President Obama, who used to routinely stay at the Waldorf as United States presidents had done since 1947, switched hotels the next time he stayed overnight in Manhattan. The White House was said to be worried that the Chinese could have planted surveillance. (Mr. Obama stayed at the Millennium One UN New York and on a subsequent trip stayed at the Palace Hotel, which is owned by a South Korean company.)


    Should there be concern over Anbang’s aggressive real estate push? And will the deals become part of the debate raging during the presidential campaign about foreigners taking American jobs and buying up assets here?


    So far, none of the candidates have made comments about the deal. But it wouldn’t be hard to see it become a talking point. In one of Mr. Trump’s position papers, he said: “America fully opened its markets to China, but China has not reciprocated,” describing its “Great Wall of Protectionism.”



    The logo for the W Hotel, owned by Starwood Hotels & Resorts Worldwide, in New York’s Times Square. Anbang made a $10.8 billion offer to buy Starwood.Credit Mark Lennihan/Associated Press

    Chinese companies have been on a foreign acquisition spree in recent years, looking abroad for deals in an effort to diversify. In January, the Wanda Group from China agreed to buy Legendary Entertainment, the film company behind Jurassic World, for $3.5 billion. The largest Chinese acquisition to date of an American company was Smithfield Foods’ $5 billion sale to China’s Shuanghui International Holdings in 2013. Last month, China National Chemical Corporation bought Syngenta, a Swiss agricultural and chemical giant, for $43 billion, the largest foreign purchase ever by a Chinese firm.

    The deals by Anbang, which has close ties to current and former Chinese government officials, will most likely be reviewed by Committee on Foreign Investment in the United States, also known as Cfius, which reviews all deals for American companies that involve national security.


    Real estate holdings may not seem like a likely target of the interagency body, but it did review and approve the Waldorf sale. At the time of the Waldorf deal, Daniel B. Pickard, a lawyer at Wiley Rein, wrote in a note to clients that the transaction “is a reminder that seemingly innocuous property transactions in the United States can have national security implications.”


    And how “national security” is defined is a moving target. Over the last year, at least 10 deals, mostly related to technology, were withdrawn over concerns that Cfius would block them.


    Then there is the question of whether these deals will turn out to be a success or follow the losing path of Japan. Nearly all the trophy buildings that Japanese companies acquired at stratospheric premiums in the late 1980s were sold at a steep loss within the decade.


    Anbang’s deal-making raises concerns. It is paying $6.5 billion to Blackstone for its hotel portfolio, yet Blackstone paid only $6 billion for them three months ago. Blackstone, arguably the world’s most skilled real estate investor, was all too happy to quickly flip it to them. And Anbang’s offer for Starwood, in which it was joined by two financial partners, looks like an opening gambit to thwart Starwood’s merger agreement with Marriott, so it is likely the final price will go even higher.


    Then there is the question of how Anbang, which didn’t even exist 15 years ago, is paying for all of these deals? Well, it has entered the risky business of becoming a “shadow bank” in China by offering investment products that promise large interest payments. Already, some analysts are expressing nervousness that Anbang could be unable to pay back its investors because it has plowed so much money into real estate. But as China’s economy cools, companies like Anbang are desperately trying to find places to invest cash outside of the country.


    Wall Street bankers and lawyers expect Chinese companies to continue to acquire assets in the United States. Anbang’s deals are only the beginning. If the pace picks up, watch for this to become an issue as the presidential campaign heads into the general election.


    In 1989, Sony’s chief, Akio Morita, was asked about all the consternation over his acquisition of assets in Hollywood. His reply?


    “If you don’t want Japan to buy it, don’t sell it.”


    http://www.nytimes.com/2016/03/15/bu...ing-spree.html

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    Tue Oct 25, 2016 | 12:43am EDT

    China's HNA Group buys $6.5 billion stake in Hilton, extends hotels push

    The logo of Hilton hotel is seen in Batumi, Georgia, May 2, 2016. REUTERS/David Mdzinarishvili/File Photo


    By Ankit Ajmera and Denny Thomas

    China's aviation and shipping giant HNA Group extended its push into hotels and Chinese tourism on Monday, paying $6.5 billion to buy a 25 percent stake in Hilton Worldwide Holdings Inc (HLT.N) from biggest shareholder Blackstone Group LP (BX.N).


    The deal marking the second investment in the hotel industry this year by ambitious and fast-growing HNA, now the operator of more than a dozen airlines including flagship carrier Hainan Airlines Co (600221.SS) and a group with more than $100 billion in assets. In April HNA bought Carlson Hotels Inc, owner of Radisson hotels, for an undisclosed sum.


    It also comes as Chinese companies step up hotel deals to tap free-spending mainland China tourists, now traveling overseas in record numbers. Their spending at home and abroad is expected to hit $72 billion this year, according to China Travel Academy, a government-backed research institute.


    Chinese companies have also been splurging on foreign acquisitions to sidestep slowing growth at home. The HNA deal would take China's overseas M&A to a record $191 billion so far this year, more than 70 percent of 2015's tally.


    HNA agreed to buy its shares in Hilton for $26.25 each, a 14.6 percent premium to Hilton's Friday's closing price, valuing the whole of Hilton at about $26 billion. Blackstone took Hilton private in 2007 for $26.7 billion, including debt, and the private equity firm listed the company in 2013 in the biggest-ever hotel IPO.


    Shares in Hilton, whose brands include Conrad Hotels & Resorts, Curio and Double Tree as well as Hilton, ended flat in New York on Monday after rising as much as 3.7 percent to $23.76 in early trading on news of HNA's stake buy.


    Established in 1993, HNA has emerged under the stewardship of co-founder and chairman Chen Feng as one of China's most acquisitive overseas dealmakers, having announced about $20 billion of deals this year alone, according to Reuters calculations.


    As well as buying aviation assets, HNA has been investing in other travel-related businesses, including Swiss airline catering firm Gategroup Holdings (GATE.S), and U.S.-listed electronics distributor Ingram Micro (IM.N). It now controls 11 companies listed on mainland China and Hong Kong stock markets.


    Earlier this month HNA's Avolon Holdings agreed to buy CIT Group (CIT.N) aircraft leasing assets worth $10 billion, a deal that will create the world's third-largest lessor.


    In hotel deals, however, it hasn't all been plain sailing for would-be Chinese buyers.


    In April, Chinese insurer Anbang Insurance Group Co [ANBANG.UL], owner of the iconic Waldorf Astoria in New York, abandoned its pursuit of Starwood Hotels & Resorts Worldwide following a bidding war with Marriott International Inc (MAR.O). Marriott completed the acquisition of Starwood in September to create the world's biggest hotel chain.


    ALSO IN AEROSPACE & DEFENSE





    Meanwhile HNA's latest deal will see it appoint two directors to Hilton's board, raising its size to 10. It will also give HNA a stake of about 25 percent in Hilton's real estate and timeshare businesses, following their expected separation by the end of 2016.

    Blackstone will continue to have two seats on Hilton's board, including Jonathan Gray who will remain as chairman.


    Evercore was the financial adviser to Hilton, while JPMorgan advised HNA.

    http://www.reuters.com/article/us-hi...-idUSKCN12O1GM

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