With the growing rate of Chinese nationals travelling the continent, it is now evident that China’s many large corporations have began snapping up lucrative investments in worldwide travel conglomerates to allow them to profit from the up turn in outbound travel.
The most recent acquisition being China’s, HNA group who for $6.5 billion dollars have acquired nearly a 25 percent stake in Hilton Worldwide Holdings from Blackstone Group who had been struggling to deal with the hotels vast company stock. This massive buy out will drop Blackstone’s, Hilton interests to around only 21% of shares in one of the largest hotel groups in the world. With Blackstone paying a whopping $26 billion in October 2007 for their slice of Hilton, their last purchase before the financial crisis hit, one estimates that they are ecstatic to be relieved of the huge financial burden.
With huge sum’s of money changing hands and HNA paying in the region of $26.25 per share, Chairman of HNA Chen Feng will be expecting to make a hefty profit on this acquisition, and with Hilton standing to gain around 15% on the share price from when HNA purchased, One thinks this is a lucrative appointment for both parties involved.
In a recent statement by Vice chairman and chief executive officer of HNA Group, Adam Tan go’s on to say:
“This investment is consistent with our strategy to enhance our global tourism business, and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms,”
Earlier this year HNA gained a majority stake in another well known hotel chain by brokering a deal with Rezidor Hotel Group AB, who own the Radisson brand, to purchase Minneapolis-based Carlson Hotels Inc. As well as their Hilton & Radisson assets HNA also purchased a minority share in Red Lion Hotels Corp.
These measures showing that the Chinese business market is taking full advantage of the tourism surge of late by acquiring as many travel related businesses as possible. With HNA’s future aspirations to be able to provide a full range of holiday products to their customers from flights and accommodation right through to organising excursions. HNA Group based in Haikou City, owns Hainan Airlines as well as many online travel company’s based in China.
For the coming two years HNA will be unable to increase its holiding’s or sell any stakes without the prior approval from Hilton. Going forward HNA will introduce two additional directors of their choice to the board at Hilton Worldwide Holdings head office, situated in McLean Virginia to oversea HNA’s interest in future projects. Also included in the proposal HNA will acquire a pro rata stake in a joint venture between Hilton Real Estate and Hilton Grand Vacations in the form of Hilton’s timeshare business at Park Hotels & Resorts due to take off around the end of this year.
With the Hilton deal proposed to be finalised in the first quarter of 2017, this will project HNA and Hilton well above the rest in the growing international tourism boom, giving them the push up the ladder to reap the rewards coming their way.
Posted on: October 27, 2016
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