Blackstone Group is selling a portfolio of US luxury hotels to the Chinese owner of New York’s Waldorf Astoria, just months after buying it for $ 4 billion.
China’s Anbang Insurance Group is near a deal to buy Strategic Hotels & Resorts from a Blackstone-managed real estate fund, according to people familiar with the situation. The price Anbang is paying couldn’t be determined, but Blackstone is expected to turn a profit after taking the company private in December.
Blackstone has built itself into the world’s largest real-estate private equity fund manager by assets, and typically holds such assets for years.
Anbang is among China’s most ambitious overseas acquirers, snatching up insurance companies and property assets across the US and Europe. Chinese companies have done more than $ 84 billion in deals since the start of the year, according to Dealogic, setting them up to exceed the record $ 108 billion of Chinese outbound acquisitions reached last year.
China National Chemical – known as ChemChina – announced China’s biggest overseas purchase earlier this year with a $ 43 billion deal to buy Swiss pesticide and seed company Syngenta. Other big deals include Haier Group’s $ 5.4 billion agreement to buy General Electric’s appliance unit and a $ 3.3 billion bid by Chinese equipment maker Zoomlion Heavy Industry Science & Technology for US crane maker Terex.
Anbang’s agreement to acquire Chicago-based Strategic Hotels will give it a substantial presence in luxury hotels across the US Strategic Hotels’ prime assets include luxury properties such as the Essex House overlooking Manhattan’s Central Park and the Hotel del Coronado near San Diego. It owns a number of Four Seasons properties, including hotels in Washington, DC, and Austin, Texas, and a resort in Jackson Hole, Wyo.
Once a provincial car insurer, Beijing-headquartered Anbang Insurance has leapt onto the global stage with several high-profile deals, including its purchase of the Waldorf Astoria New York hotel for $ 1.95 billion in February 2015 from Hilton Worldwide Holdings, which counts Blackstone as its largest shareholder. The property will continue to be managed by Hilton under a 100-year management agreement.
The Waldorf Astoria New York sale carried the steepest price tag ever for a US hotel at the time, brokers said, although it wasn’t the highest on a per-room basis.
Chinese investors have sought to buy US properties that carry prestige, like the Waldorf Astoria, and will benefit from a growing number of Chinese travelers abroad. Many Chinese companies are also seeking to acquire US businesses that can help China upgrade its domestic industries with better technology.
Anbang has also cut a number of deals in the insurance world. It agreed to buy US insurer Fidelity & Guaranty Life for $ 1.57 billion last year. It paid around $ 1 billion for a majority stake in a South Korean insurer and has purchased insurance companies in Belgium and the Netherlands.
Write to Kane Wu at Kane.Wu@wsj.com
This article was published by The Wall Street Journal