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While Huazhu and Jin Jiang are acquiring, HNA and Anbang are selling their assets

HNA Group has finally agreed to sell Radisson to Jin Jiang, Anbang is looking to unload a $5.5Bn portfolio of hotels and Huazhu acquired 71.2% shares in Blossom Hill.

Anbang Insurance put a luxury hotel collection up for sale, pricing it at $5.5 billion. According to The Wall Street Journal, the Chinese holding company is selling its portfolio in order to raise money following its seizure by the Chinese government.

Also read: Hilton claims Anbang financial woes won’t impact management of Waldorf Astoria

The portfolio consists of hotels that Anbang purchased from Blackstone Group in 2016. Anbang has been entertaining offers for individual hotels, such as:

  • JW Marriott Essex House New York (515 rooms)
  • Four Seasons Jackson Hole (156 rooms)
  • InterContinental Chicago Magnificent Mile (872 rooms)
  • InterContinental Miami (641 rooms)

Now, however, Anbang appears to be looking to sell the entire portfolio.

Pressure from the Chinese government

Anbang, the regulator claimed, had violated regulations, putting into question its ability to pay insurance claims. The investigation resulted in the jailing of former Chairman and CEO, Wu Xiaohui, on charges of fraud and embezzlement.

Since the seizure, Anbang has received $9.7 billion in capital to stabilize its operations, but in order to stabilize the organization it has been ordered to sell off its assets.

In August, China formally implemented measures to limit and restrict what it calls extensive overseas investments made by domestic groups. In response, companies like Dalian Wanda, Fosun International and HNA Group are looking to offload their assets.

HNA keeps on selling

This year alone, HNA sold Hilton Worldwide Holdings and its spinoffs for a combined $8.5 billion and began unloading its shares in NH Hotel Group to Minor International. 

Also read: HNA organizes the sale of its shares in NH Hotel Group

In August, HNA even agreed to sell its holdings in Radisson Hospitality AB and Radisson Holdings to a consortium headed by Jin Jiang International, which is controlled by the Shanghai government and owns 12.3% of AccorHotels.

In 2017, Jin Jiang recorded a capacity increase of +12.9%. Thanks to its expansion in Asia, the takeover of the Indian company Sarovar Hotels and the voluntary label Hotels & Préférence, the Chinese group has passed the 680,000 rooms mark.

Also read: Worldwide Hospitality Ranking 2018: Between acquisitions and divestments, rates are tightening

"HNA has been extremely supportive of our business," said John Kidd, CEO of Radisson Hospitality. "Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang to join one of the largest hotel companies in the world."

Meanwhile, HNA Group’s Chairman Chen Feng promoted two family members as key executives, tightening his family’s control over the embattled Chinese conglomerate after the sudden death of Co-Chairman, Wang Jian.

Also read: [Update] HNA Group Announces Death of Co-Founder and Chairman Wang Jian

The management changes come as Chen Feng seeks to persuade banks, investors and the government to restore their confidence in a group that’s saddled with one of the biggest piles of debt in corporate China.

Huazhu Group acquires Blossom Hill Hotels & Resorts

Huazhu announced that its wholly-owned subsidiary Huazhu Hotel Management has entered into share transfer agreements with Beijing Tsingpu Travel Culture Development and Suzhou Tiancheng Jiaqi Tourism Industry Investment, two shareholders in Blossom Hill Hotel Investment Management, to acquire 71.2% of outstanding shares in Blossom Hill.

Upon completion, Huazhu will own an aggregate of 82.5% of shares in Blossom Hill, and Blossom Hill Hotels & Resorts will become part of Huazhu's portfolio.

Huazhu may continue to acquire some remaining minority shareholders' shares in Blossom Hill.

"We highly value Blossom Hill's luxury, boutique hotels & resorts with aesthetic decor and cultural touch. We see this acquisition as a win-win combination for both Huazhu and Blossom Hill: with the addition of Blossom Hill hotels & resorts to our hotel portfolio, we are able to offer more diversified choices to our over 100 million HUAZHU Rewards members; at the same time, this acquisition is also expected to improve Blossom Hill's occupancy rate," commented Jenny Zhang, CEO of Huazhu.

Blossom Hill is a boutique hotel and resort operator founded in 2009, with its roots in Lijiang, Yunan Province. As of May 31, 2018, Blossom Hill Hotels & Resorts had 21 hotels and 575 rooms in operation, spanning across 10 tourist cities in China.

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