Three Chinese firms are vying to take over the operation of Starwood Hotels & Resorts Worldwide Inc. in a move seen as the biggest takeover of a U.S. firm. (Photo : www.jewishbusinessnews.com)
Three Chinese companies are set to bid for Starwood Hotels & Resorts Worldwide Inc., which operates the Sheraton, Westin and W hotel chains, believed to be the biggest ever Chinese takeover of a United States company, the China Daily reported.
According to the report, the three companies vying for Starwood are hotel giants Shanghai Jin Jiang International Hotels (Group) Co. Ltd., Hainan Airlines's parent company HNA Group and sovereign wealth fund China Investment Corp.
The Chinese bids came after the Anbang Insurance Group Co.'s acquisition of the landmark Waldorf Astoria hotel in New York from Hilton Hotels & Resorts for $1.95 billion in 2014.
Dealogic, a market information provider, said that if the deal succeeds, it would be the largest acquisition of a U.S. company by a Chinese firm.
The report said that at present, the Shuanghui Group was the last Chinese company that has made the largest deal in the U.S. by spending $7 billion for Smithfield Foods Inc., a pork producer, in 2013.
On Tuesday, Oct. 27, Starwood shares registered the biggest daily increase since 2009, climbing 9.1 percent to close at $74.81 per share, taking its market value close to $12 billion.
On the other hand, Shanghai Jin Jiang has been suspended from trading, while Hainan Airlines, the listed company of HNA Group, dropped 0.74 percent to 4.03 yuan (63 U.S. cents) per share.
"Jin Jiang is moving toward its goal of becoming a leading mega hotel group in the world," Li Yuebo, a senior analyst at Fuzhou-based Industrial Securities Co., said.
The report added that in the past few years, Jin Jiang has been expanding its presence at home and abroad. On Friday, Oct. 23, the company announced that it was buying 81 percent of Keystone Lodging Holdings Ltd. for more than 8.26 billion yuan, making Jin Jiang China's biggest hotelier and one of the global top five. The company also acquired Europe's second largest hotel group Groupe Du Louvre earlier this year for 1.21 billion euros ($1.33 billion).
Meanwhile, HNA Group became the largest shareholder of NH Hotels in 2014 when it acquired 29.5 percent share in the Spanish hotel chain. In September, it also purchase a landmark office building in Canary Wharf, London's financial district.
Xia Yangyang, director of international capital at global property company JLL, said that China's outbound investment into real estate is expected to reach $20 billion by the end of this year, an increase from $16.5 billion in 2014.
