The Chinese insurance company Anbang Group has offered to acquire Starwood Hotels and Resorts Worldwide for $78 per share in cash, or the equivalent of $13.3 billion. Last November 17, Starwood had agreed to merge with Marriott International through a stock-and-cash deal valued at $13.06 billion as of Thursday’s close. That merger would have created the world’s largest hotel company.
The Wall Street Journal and other news outlets report that Starwood intends to set aside its deal with Marriott, which has until March 28 to revise its offer. If it ultimately accepts Anbang’s bid, Starwood would have to pay Marriott a $400 million termination fee. The Real Deal, which covers New York real estate, reports today that Starwood had accepted Anbang’s takeover offer
Anbang, based in Beijing, made headlines two years ago when it paid about $2 billion to acquire New York City’s landmark Waldorf Astoria hotel. Days before it upped its bid for Starwood from $76 per share, Anbang agreed to purchase the 16- property Strategic Hotels & Resorts from Blackstone Group for $6.5 billion including debt.
Time magazine’s Rana Foroohar notes that Anbang’s buying spree comes at a time when investors have been fleeing China’s slowing economy. About $1 trillion in capital left China last year, and “one way it’s going out the door is via acquisitions of foreign firms,” Foroohar writes. Dealogic estimates that Chinese firms spent $106 billion on overseas acquisitions in 2015, and nearly that much so far this year.
Anbang’s well-connected owner, Wu Xiaohui, is married to the granddaughter of Deng Xiaoping, the Communist leader who put China on a path toward a more market-driven economy. Anbang’s largest shareholders are state-owned companies such as Shanghai Automotive Industry Group Corp and the oil giant Sinopec Group, according to Fortune magazine.
The Real Deal estimates that Anbang’s offers for Strategic and Starwood are roughly equal to the total volume of Chinese investment in U.S. commercial real estate from 2007 to 2015.
Related Stories
Modular Building | Feb 1, 2016
Hotel developers turn to modular construction to meet demand
A $90 million rebuilding project in Yellowstone National Park exemplifies this trend.
Casinos | Jan 30, 2016
Boston ends its opposition to a casino, Wynn to build $1.7B resort
A judge’s ruling last year paved the way for Wynn Resorts to begin construction on a 33-acre gambling palace in Everett, Mass.
Resort Design | Jan 26, 2016
Atlantis planning to build the world’s most expensive resort in Hawaii
The project was first announced in 2005 but has progressed little since.
Hotel Facilities | Jan 19, 2016
8 trends sparking the hospitality sector
Hotels and restaurants are branching out to attract more customers—and hold onto them longer.
| Jan 14, 2016
How to succeed with EIFS: exterior insulation and finish systems
This AIA CES Discovery course discusses the six elements of an EIFS wall assembly; common EIFS failures and how to prevent them; and EIFS and sustainability.
Hotel Facilities | Jan 13, 2016
Hotel construction should remain strong through 2017
More than 100,000 rooms could be delivered this year alone.
Urban Planning | Jan 4, 2016
The next boomtown? Construction and redevelopment sizzle in San Diego
The city's emission-reduction plan could drive influx into downtown
Hotel Facilities | Dec 14, 2015
Greater Fort Lauderdale is enjoying a building boom
This business-friendly South Florida market has several large hotel and multifamily projects in construction.
Greenbuild Report | Dec 14, 2015
Sensible sustainability: The new standard for hotels
In October 2008, The Proximity, a 147-room hotel in Greensboro, N.C., became the first LEED Platinum–certified hotel in the U.S. Since then, only two other hotels have earned LEED Platinum.
Multifamily Housing | Dec 7, 2015
Are long-term apartment rentals Airbnb’s next target?
Some developers are thinking about that possibility, says one West Coast real estate consultant.
