Chinese owner of Waldorf bets big

HONG KONG • The Chinese owner of the Waldorf Astoria is placing an even bigger wager on high-end lodging in the United States.

The Blackstone Group has agreed to sell Strategic Hotels and Resorts in a deal valued at US$6.5 billion just months after buying it, according to a person with knowledge of the deal who was not authorized to comment. The buyer is Anbang Insurance Group, which bought the Waldorf Astoria hotel in New York for US$1.95 billion in 2014.

With the deal, the Chinese insurance company would clinch a real estate investment trust that owns and invests in high-end properties. They include Four Seasons hotels and resorts in the Silicon Valley area, Washington and Jackson Hole, Wyo. Strategic Hotels also owns the JW Marriott Essex House Hotel near Central Park in Manhattan.

Details about the deal were not available.

The deal is a quick turnaround for Blackstone. Just six months ago, the New York private equity firm struck a deal to buy Strategic Hotels valued at about US$6 billion, including the assumption of debt.

With growth s l owing at home and the renminbi weakening, Chinese companies have been looking overseas. In February, a Chinese state-owned company called China National Chemical Corp., or ChemChina, agreed to buy the Swiss agriculture conglomerate Syngenta AG for US$ 43 billion, which, if completed, would be the biggest Chinese purchase of a foreign company. Last year, Chinese foreign direct investment in the United States reached US$15.7 billion, a record, according to the consulting firm Rhodium Group.

When it bought the Waldorf two years ago, Anbang said it was eyeing stable investment returns from property in North America. Anbang has been active with its money in other industries in the United States, snapping up Fidelity & Guaranty Life Insurance Co. late last year.

The insurance company has grown quickly in recent years and has assets worth 1.65 trillion renminbi and has about 30,000 employees. It has also expanded its services in banking and asset management. The company is politically connected in China, with its chairman married to the granddaughter of Deng Xiaoping, the country’s former paramount leader and the architect of its unique mix of capitalist entrepreneurship and state planning.

Anbang said when it bought the Waldorf that it planned to increase its overseas assets and that Europe and North America would be priority areas.

ANBANG SAID IT WAS EYEING STABLE INVESTMENT RETURNS.