Chinese firm HNA takes 25 per cent stake in Hilton Hotels
Chinese conglomerate HNA Group have announced it will buy 25 per cent of Hilton Worldwide Holdings Inc from Blackstone Group L.P for $6.5billion dollars.
The latest move by a Chinese company into Western assets will see HNA pay $26.25 per share in cash for the stake, 15 per cent above Hilton's closing stock price on Friday of $22.91.
This latest move by HNA is part of the group's efforts to become a "global tourism business," the company's chief executive Adam Tan said.
Blackstone, who bought the hotel chain for $26bn in 2007, will see their share of the business drop to 21 per cent when the deal goes through, expected to be in 2017.
The news has seen Hilton shares increase by seven per cent in New York this morning. Hilton posted healthy results earlier this year, with a sharp increase in like-for-like earnings in its first quarter.
"We believe this mutually beneficial relationship will open new opportunities for our brands and guests around the world, particularly in light of HNA's strong position in the fast-growing Chinese travel and tourism market, the largest outbound travel and tourism market in the world," said Hilton chief executive Christopher J Nassetta.
But Hainan-based HNA is still awaiting regulatory approval for seven other acquisitions from the past two years. It has done 35 deals worth at least $27bn since the start of 2015.
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In April this year it bought 100 per cent stake in US-based Carlson Hotels, which owns the Radisson and Park Plaza brands, and in July said it would pay $10bn for the leasing arm of financial holdings company CIT Group.
It is one of China's biggest tourism companies and has nearly 2,000 hotels worldwide.