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Chinese Insurer Anbang To Acquire Strategic Hotels & Resorts For $6.5 Billion From Blackstone Group LP

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(Credit: Andrew Harrer/Bloomberg/Getty Images) Stephen 'Steve' Schwarzman, co-founder, chairman and chief executive officer of Blackstone Group LP, speaks at an Economic Club of Washington luncheon in Washington, D.C., U.S., on Tuesday, Sept. 15, 2015. Blackstone, the world's biggest manager of alternative assets, oversees an industry record $333 billion in private equity, real estate, credit assets and hedge funds.Blackstone Group Chief Executive Officer Stephen Schwarzman Speaks To Economic Club Of Washington
March 14
7:48 AM 2016

Anbang Insurance Group Co., the Chinese insurer, has agreed to acquire Strategic Hotels & Resorts for $6.5 billion from Blackstone Group LP. The deal is being taken place just three months after the private equity group took the luxury hotels collection private. It appears as the latest sign of China's march towards acquiring foreign assets whenever the world's second-largest economy grapples with turbulent economic conditions.  

Strategic Hotels & Resorts owns 16 luxury US hotels including San Diego's waterfront Hotel del Coronado and New York's JW Marriott Essex House Hotel. Blackstone has transformed into the world's largest private equity fund manager by assets and typically holds such assets for years. Also the largest shareholder in hotel group Hilton, has closed a deal to acquire the company for $6 billion in December, according to a report published in Financial Times.

The price has been analyzed as $450 million more that Blackstone has paid for Strategic in December. The New York based private equity firm has been planning selling individual assets in the portfolio. However, Anbang has offered a pre-emptive offer for the entire company, reports Bloomberg citing persons familiar with the matter, seeking anonymity as the source.

Christine Anderson, a spokeswoman for Blackstone has declined to comment. Meanwhile, Philip Yee, a managing director at Anbang's North American unit, has also followed the trait.

The transaction has been marked as a deeper push into U.S. hotels for Beijing-based Anbang. The Chinese insurer has purchased New York's landmark Waldorf Astoria last year. The recent deal has been acknowledged as the largest U.S. real estate purchase by a buyer from mainland China.

Anbang has appeared as the China's most ambitious overseas acquirer, gobbling up insurance companies and property assets across the U.S. and Europe. Chinese companies have made acquisition for more than $84 billion this year and going to exceed the record of $108 billion, set up last year, according to a report published in The Wall Street Journal.

China National Chemical Co. or ChemChina has announced the largest Chinese overseas acquisition earlier this year for $43 billion. Through the deal, Chemchina has purchased Swiss pesticide and seed company Syngenta AG. Haier Group's $5.4 billion agreement to buy General Electric's appliance unit appears among other major deals.

Anbang Insurance, a provincial car insurer has been elevated to the global arena with several high profile deals. The deals include purchase of the Waldorf Astoria New York hotel for $1.95 billion in February 2015 from Hilton Worldwide Holdings Inc. The property is being and will continue to be managed by Hilton under a 100-year management agreement.

Blackstone Group LP has acquired Strategic Hotels & Resorts for $6 billion during December. Blackstone has been trying to sell some of its individual assets while Anbang has offered to acquire the entire company. Anbang has finally agreed to acquire the business for $6.5 billion while transforming its image as a provincial car insurer to a global investor.

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