China’s Anbang Insurance Group Co. has inked a deal to buy Starwood Hotels & Resorts Worldwide (NYSE:HOT), the world’s seventh-largest hotel company, for $78 per share. The agreement comes as a direct challenge to Marriott International (NASDAQ:MAR), the American hotel giant that made a $67.22 per share offer — at current values — in November.
The Anbang deal, first reported by CNBC, comes just a few days after Starwood’s talks with the Chinese suitor became public. Marriott is expected to submit a counteroffer in the coming days, sources told CNBC. Starwood owns hotel brands that include Westin and Sheraton.
Anbang’s appetite for American hotel chains stems from a pressing need among Chinese investors for safe, high-yield investments. U.S. hotels — and the premium real estate they sit on — have proved particularly alluring. In 2014, Anbang became the new owner of the famed Waldorf Astoria Hotel in New York.
On Monday, the insurance conglomerate closed on a deal for Strategic Hotels & Resorts Inc., an American luxury properties company, from private equity giant Blackstone.
High-profile deals such as these have triggered government scrutiny, however. The Treasury Department’s Committee on Foreign Investment in the United States is charged with reviewing corporate deals with overseas buyers to ensure that national security priorities aren’t compromised. The potential Starwood acquisition would likely need to pass muster with the committee in order to take place.
Hotels aren’t the only assets the growth-hungry Anbang Insurance Group has been after in recent years. The Beijing company has also picked up acquisitions ranging from Belgian financial firms to the American insurer Fidelity & Guaranty Life.
But Anbang's rival isn't throwing in the towel. “Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders,” the company said in a statement. “Marriott is in the process of reviewing the Anbang consortium’s proposal and is carefully considering its alternatives.”
Shares of Starwood rose 4.5 percent to $79.85 in pre-market trading.