China’s Anbang challenges Marriott with $13 billion Starwood offer
China’s Anbang Insurance Group Co has challenged Marriott International Inc’s (MAR.O) merger with U.S. hotel operator Starwood with a $12.8 billion cash offer, burnishing its credentials as one of China’s top corporate acquirers.
The non-binding bid, unveiled on Monday, just days after Anbang agreed to acquire Strategic Hotels & Resorts Inc from buyout firm Blackstone Group LP (BX.N) for $6.5 billion, would represent by far the biggest Chinese investment in U.S. real estate assets.
Chinese insurers are rushing to acquire high-yielding assets as they struggle to keep up with the policy liabilities of the country’s ageing population. U.S. assets are also seen as a good hedge against any future weakness in the yuan.
The head of China’s insurance regulator, Xiang Junbo, wrote in January in a magazine published by the country’s central bank that Chinese insurers should venture overseas for investments. These investments, however, are not without hurdles.
Anbang’s $2 billion acquisition of the iconic Waldorf Astoria Hotel in New York, which was completed last year, attracted scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals over possible national security concerns. U.S. President Barack Obama used to stay at that hotel when visiting United Nations headquarters in New York.
Reportedly set up in 2004 with only $60 million and a focus on car insurance, Anbang now has total assets of about $253 billion. Its U.S. spokesman declined to comment for this story.
In a 2015 recruiting event through Harvard, Anbang Chairman Wu Xiaohui offered more insight into his company’s interest in Western real estate. Arguing that the cost of lifetime ownership in the Waldorf Astoria is “very cheap in my eyes” compared to similar opportunities in the center of Beijing, Wu also contended that the investment will be a good play on the increasingly affluent Chinese tourist.
“Recently, news regarding our Waldorf purchase flooded the Internet in China, which brought us extra brand recognition and business opportunities. This is what I call the spillover benefits,” Wu said, according to a transcript provided by the company. “A previously little-known hotel to local Chinese people, Waldorf Astoria has became more recognizable and famous in China after it was purchased by Anbang. Therefore there are mutual benefits for both China and America.”
Wu also hinted in that 2015 discussion that his team was aggressively seeking further international expansion.
“The total number of airline miles travel by this team is equal to a round trip between the Earth and the moon, which is a testament of our investment decision process,” Wu said. “We must win the first battle and every battle thereafter as we are representing Chinese enterprises going global.”
more anbang machinations..working hard on the cheap buy ups..
“Reportedly set up in 2004 with only $60 million and a focus on car insurance, Anbang now has total assets of about $253 billion. Its U.S. spokesman declined to comment for this story.”
who are these guys?
“We must win the first battle and every battle thereafter as we are representing Chinese enterprises going global.”