China’s HNA Group buys US$6.5b stake in Hilton

HONG KONG: China’s aviation and shipping giant HNA Group extended its push into hotels and Chinese tourism on Monday, paying US$6.5 billion (RM27 billion) to buy a 25% stake in Hilton Worldwide Holdings Inc from biggest shareholder Blackstone Group LP.

The deal marking the second investment in the hotel industry this year by ambitious and fast-growing HNA, now the operator of more than a dozen airlines including flagship carrier Hainan Airlines Co and a group with more than US$100 billion in assets. In April HNA bought Carlson Hotels Inc, owner of Radisson hotels, for an undisclosed sum.

It also comes as Chinese companies step up hotel deals to tap free-spending mainland China tourists, now travelling overseas in record numbers. Their spending at home and abroad is expected to hit US$72 billion this year, according to China Travel Academy, a government-backed research institute.

Chinese companies have also been splurging on foreign acquisitions to sidestep slowing growth at home. The HNA deal would take China’s overseas M&A to a record US$191 billion so far this year, more than 70% of 2015’s tally.

HNA agreed to buy its shares in Hilton for US$26.25 each, a 14.6% premium to Hilton’s Friday’s closing price, valuing the whole of Hilton at about US$26 billion. Blackstone took Hilton private in 2007 for US$26.7 billion, including debt, and the private equity firm listed the company in 2013 in the biggest-ever hotel IPO. – Reuters