Blackstone Nears Deal to Sell Hotel Portfolio to Anbang

HONG KONG—Blackstone Group LP is selling a portfolio of U.S. luxury hotels to the Chinese owner of New York's Waldorf Astoria, just months after buying it for $4 billion.

China's Anbang Insurance Group Co. is near a deal to buy Strategic Hotels & Resorts Inc. from a Blackstone-managed real-estate fund, according to people familiar with the situation. The price Anbang is paying couldn't be determined, but Blackstone is expected to turn a profit after taking the company private in December.

Blackstone has built itself into the world's largest real-estate private-equity fund manager by assets, and typically holds such assets for years.

Anbang is among China's most ambitious overseas acquirers, snatching up insurance companies and property assets across the U.S. and Europe. Chinese companies have done more than $84 billion in deals since the start of the year, according to Dealogic, setting them up to exceed the record $108 billion of Chinese outbound acquisitions reached last year.

China National Chemical Corp.—known as ChemChina—announced China's biggest overseas purchase earlier this year with a $43 billion deal to buy Swiss pesticide and seed company Syngenta AG. Other big deals include Haier Group's $5.4 billion agreement to buy General Electric's appliance unit and a $3.3 billion bid by Chinese equipment maker Zoomlion Heavy Industry Science & Technology Co. for U.S. crane maker Terex Corp.

Anbang's agreement to acquire Chicago-based Strategic Hotels will give it a substantial presence in luxury hotels across the U.S. Strategic Hotels' prime assets include luxury properties such as the Essex House overlooking Manhattan's Central Park and the Hotel del Coronado near San Diego. It owns a number of Four Seasons properties, including hotels in Washington, D.C., and Austin, Texas, and a resort in Jackson Hole, Wyo.

Once a provincial car insurer, Beijing-headquartered Anbang Insurance has leapt onto the global stage with several high-profile deals, including its purchase of the Waldorf Astoria New York hotel for $1.95 billion in February 2015 from Hilton Worldwide Holdings Inc., which counts Blackstone as its largest shareholder. The property will continue to be managed by Hilton under a 100-year management agreement.

The Waldorf Astoria New York sale carried the steepest price tag ever for a U.S. hotel at the time, brokers said, although it wasn't the highest on a per-room basis.

Chinese investors have sought to buy U.S. properties that cary prestige, like the Waldorf Astoria, and will benefit from a growing number of Chinese travelers abroad. Many Chinese companies are also seeking to acquire U.S. businesses that can help China upgrade its domestic industries with better technology.

Anbang has also cut a number of deals in the insurance world. It agreed to buy U.S. insurer Fidelity & Guaranty Life for $1.57 billion last year. It paid around $1 billion for a majority stake in a South Korean insurer and has purchased insurance companies in Belgium and the Netherlands.

Bloomberg News first reported that Anbang had agreed to purchase Strategic Hotels from Blackstone Group.

Write to Kane Wu at [e-mail]

(END) Dow Jones Newswires

March 13, 2016 20:55 ET (00:55 GMT)

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