Starwood gets $13.2bn offer from Anbang

Mar 18, 2016, 3:06 PM EDT
(Source: lo-ny/flickr)
(Source: lo-ny/flickr)

Starwood recieved and plans to accept a higher $13.2 billion offer from Anbang, topping Marriott.

Bloomberg reports:

Starwood Hotels & Resorts Worldwide Inc., owner of brands such as Westin, Sheraton and W, said it plans to accept a $13.2 billion takeover bid by China’s Anbang Insurance Group Co. and gave suitor Marriott International Inc. a deadline to make a counteroffer. Anbang and its partners will pay $78 a share in cash for Starwood, according to a statement Friday. The offer is $2 a share more than the surprise bid the group made last week and eclipses Marriott’s cash-and-stock deal, which Starwood agreed to in November and is currently worth about $69.50 a share. Marriott has a March 28 deadline to renegotiate its agreement and salvage its plan to create the world’s biggest hotel operator. A takeover by Anbang would extend a push into U.S hotels that started last year with its $1.95 billion purchase of Manhattan’s Waldorf Astoria. The sweetened bid underscores the intense interest in hotels from Chinese investors, who are seeking to buy hard assets abroad and capture demand from a surge in Chinese travelers. 

Reuters notes:

If Anbang's offer is successful, it would boost the company's reputation as one of China's top corporate acquirers, adding Starwood with its nearly 1,300 hotels in about 100 countries. The offer follows Anbang's $6.5 billion deal struck last week for Strategic Hotels & Resorts Inc and its $2 billion purchase of New York's iconic Waldorf Astoria hotel last year. The U.S. Committee on Foreign Investment in the United States, an interagency panel that reviews deals to ensure they do not harm national security, will look at Starwood's several hundred U.S. hotels to see if any are close to critical facilities, said Stephen Heifetz, a partner with law firm Steptoe & Johnson LLP, who has experience of CFIUS reviews. In 2012, CFIUS ordered the purchase of a wind farm in Oregon to be reversed because it was too close to a naval base. Heifetz said this was unlikely in this case. "I'd be surprised if there were any deal-killer for a large multi-property location," he said, although he warned that the companies might have to make some concessions to get the deal through.

The Wall Street Journal writes:

Chinese companies have lately landed takeover agreements for everything from Swiss agriculture company Syngenta AG-at $43 billion, the biggest such deal ever-to General Electric Co.’s appliance unit and several semiconductor makers. In all, Chinese companies have agreed to $102 billion in foreign deals this year, nearly even with the record $106 billion for all of 2015, according to Dealogic. Anbang’s deal for Starwood would represent China’s biggest purchase of a U.S. company. The company has spent billions purchasing part or all of insurers in South Korea, Europe and the U.S., as well as taking stakes in listed Chinese developers, a bank, a traditional Chinese medicine maker and a wind turbine manufacturer. While it ranks outside the top 10 of Chinese insurers by premiums, the Beijing-based company has done nearly $28 billion worth of deals, according to Dealogic, with most of those acquisitions of foreign companies and coming in the past two years.