China’s Anbang makes $14-bn bid for US Starwood hotel chain
A fight for control of the Starwood hotel chain is under way following a $14 billion buyout offer on Monday from a consortium led by China's Anbang Insurance Group. Anbang, which remains largely unknown to most Americans, has quickly positioned itself to become a player in the US hotel industry, acquiring marquee properties.
It made a splash in the fall of 2014 when it bought New York's Waldorf Astoria for almost $2 billion. And just days ago, it cut a $6.5 billion deal for Strategic Hotels & Resorts Inc., which owns tony properties like The Westin St.
Francis in San Francisco, JW Marriott Essex House in New York and Hotel Del Coronado in San Diego. Strategic also owned five different Four Seasons hotels, two Ritz Carltons and six other luxury properties. Now it is going toe-to-toe with US hotel giant Marriott International Inc., which said late last year that it would buy Starwood, the owner of Sheraton, Westin and St. Regis hotels, in a deal worth $12.2 billion. That acquisition would create the world's largest hotel chain with 5,500 properties and more than 1.1 million rooms around the world.
Such scale would give the combined company pricing power when negotiating commissions with online travel agencies such as Expedia and Priceline, as well as help it land more corporate travel contracts. The next-largest hotel company is Hilton Worldwide with 4,500 properties and about 735,000 rooms. Starwood essentially put itself up for sale last April.
The company has struggled to grow as fast as its rivals, particularly in "limited service hotels," smaller properties which don't have restaurants or banquet halls.
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