China’s Anbang Insurance Group Buys Strategic Hotels & Resorts for $6.5B

by Nellie Day

CHICAGO — Beijing-based Anbang Insurance Group Co. has agreed to purchase Strategic Hotels & Resorts, which owns 16 hotels throughout the U.S. Several news outlets, including The Wall Street Journal, report the purchase price as $6.5 billion, citing anonymous sources involved in the not-yet-announced deal.

Anbang is purchasing the portfolio from Blackstone Group, which acquired Strategic Hotels about three months ago. The Chinese insurer is paying about $450 million more than Blackstone paid for the assets.

Properties under the Chicago-based Strategic Hotels & Resorts flag include the JW Marriott Essex House in New York City; the Montage in Laguna Beach, Calif ; the Hotel del Coronado in San Diego; Ritz Carlton properties in Moon Bay and Laguna Niguel, Calif.; InterContinental hotels in Chicago and Miami; and Four Seasons hotels in Washington, Austin, Texas, and Silicon Valley, Calif.

Anbang purchased the famed Waldorf-Astoria in New York from Hilton Worldwide Holdings for nearly $2 billion in late 2014. The acquisition was one of the highest price-per-room hotel transactions ever, according to Fortune magazine.

Anbang also submitted a $12.8 billion bid to takeover Starwood Hotels & Resorts Worldwide, which could disrupt a pending deal with Marriott International. The consortium offered to pay an all-cash rate of $76 for each of the company’s outstanding shares. This is a 7.9 percent premium over Marriott’s cash-and-stock deal, which is valued at $65.38, or $11 billion, the Journal reports.

Starwood noted it has not changed its recommendation to support the Marriott merger, though officials said it was allowed to consider other bids until March 17. Marriott further noted Starwood would owe the firm a $400 million termination fee if the deal falls through. Both companies’ shareholders are scheduled to vote on the deal on March 28.

Anbang Insurance Group Co. is one of the largest insurance groups in China. It maintains more than 3,000 branches in 31 Chinese provinces.

New York-based Blackstone Group is a massive investment firm with more than $330 billion in assets under management.

— Nellie Day

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