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October 25, 2016

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HNA Group to acquire 25% of Hilton

CHINESE aviation and shipping conglomerate HNA Group said yesterday that it would buy about 25 percent of hotel operator and manager Hilton Worldwide Holdings Inc from biggest shareholder Blackstone Group LP for US$6.5 billion.

HNA Group will buy the stake for US$26.25 per share, representing a premium of 14.6 percent to Hilton’s closing price on Friday and valuing the hotel company at about US$26 billion.

Blackstone took Hilton private in 2007 for US$26.7 billion, including debt. In 2013, the private equity firm listed the company in the biggest-ever hotel IPO.

This is HNA Group’s second investment in the US hospitality industry this year.

The company agreed in April to buy Carlson Hotels Inc, the owner of the Radisson hotel chain, including its 51.3 percent majority stake in Rezidor Hotel Group AB, for an undisclosed sum.

Chinese companies have been splurging on foreign acquisitions to sidestep slowing growth at home.

Overseas mergers and acquisitions by Chinese companies have touched a record US$181 billion so far this year, about 70 percent more than the whole of last year.

HNA Group’s Avolon Holdings agreed earlier this month to buy CIT Group’s aircraft leasing assets worth US$10 billion in a deal that will create the world’s third-largest lessor.

However, Chinese insurer Anbang Insurance Group Co, which bought the iconic Waldorf Astoria in New York in 2015, abandoned its pursuit of Starwood Hotels & Resorts Worldwide following a bidding war with Marriott International Inc.

Marriott completed the acquisition of Starwood in September to create the world’s biggest hotel chain.


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