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Chinese insurance company Anbang buys Strategic Hotels for $6.5 billion

The group Anbang Insurance has starred in a series of cover stories in financial papers with the takeover of Strategic Hotels from Blackstone, just three months following its acquisition and supporting a consortium that would like to buy Starwood Hotels for $13 billion.

Just three months after a successful EPO Strategic Hotels & Resorts, owner of 16 luxury properties in the United States and Europe, Blackstone has found a new buyer for the new portfolio that is ready to pay up to $450 million more, of 5 milliards. It is undoubtedly the fastest capital gains recorded at this level by  Blackstone Group LP.

Anbang Insurance Group is mobilizing its capital to push its way into America's hotel industry, perhaps the world's. In 2015, it bought the Waldorf Astoria in New York for close to $2 billion from the Hilton group which is engaged to provide management services for the next hundred years. According to information that seeped out of Wall Street, Anbang together with J. Christopher Flowers (former director at Goldman-Sachs), owner of an opportunistic investment fund, made an offer of $13 billion cash in order to take over all the shares in Starwood Hotels & Resorts.

The portfolio of Strategic Hotels includes properties such as the Ritz-Carlton Half Moon Bay and the Ritz Carlton Laguna Niguel in California, the iconic Coronado Beach in San Diego, the Four Seasons Hotels in Austin, Texas, in Silicon Valley, California and in Washington, the Essex House (ex-Jumeirah) in New York, as well as the walls of the InterContinental Hotels in Chicago and Miami.

This Chinese stranglehold on the treasures of American hotels raises questions as to the motivations behind these financial investments and the eventual consequences on the management of the properties. The Chinese group Anbang, based in Beijing, is not even among the riches insurances in the country. It only represents 3% of the insurance market and manages less than 100 billion euros in assets. It recently adopted an aggressive real estate acquisition strategy. 

Also read:

  • Takeover of Strategic Hotels & Resorts by Blackstone confirmed
  • Strategic Hotels & Resorts, luxury hotel REIT, now on the market
  • Hilton Worldwide sells the Waldorf Astoria New York


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