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America’s Starwood hotel group ‘about to turn Chinese’

March 21, 2016 Headline News, Hotel Developments No Comments Print Print Email Email

egtmedia59A massive anticipated hotel deal – the takeover of Starwood Hotels & Resorts Worldwide by Marriott International – has been derailed at the last moment by an enormous cash offer from a Chinese insurance group.

Starwood said the USD 13.2 billion cash offer from China’s Anbang Insurance Group was superior to Marriott’s bid. According to a report by Reuters, that sets the stage potentially for the largest-ever deal by a Chinese company in the US.

It certainly shows there’s plenty of money in hotels – if anybody ever doubted it.

The Chinese approach comes at a pivotal time for Starwood Hotels & Resorts Worldwide. The hotel group has just signed three new hotel deals in Cuba, making it the first US based hospitality company to enter the Cuban market in nearly 60 years. Relations are warming between the US and Cuba after a half-century standoff and US President Barack Obama is currently in Havana, the Cuban capital, on a historic visit.

Starwood operates nearly 1300 properties, with brands including Sheraton, Westin, W Hotels, St Regis and Le Méridien.

Some analysts expect Marriott to counter with an even bigger offer, perhaps chucking in an extra USD 700 million in cash as a sweetener. Marriott has until 28 March 2016 to do that.

Beijing-based Anbang was founded in 2014 and initially concentrated on car insurance. It leapt to prominence in the hotel industry last year when bought New York’s iconic Waldorf Astoria hotel from Hilton Worldwide for USD 2 billion – the highest price ever paid for a US hotel.

Just recently, Anbang announced it was buying Strategic Hotels & Resorts, a portfolio of high-end hotels including some Ritz-Carlton, Fairmont and Four Seasons properties, from the Blackstone Group for USD 6.5 billion.

Written by Peter Needham

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