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China's Anbang upsets Marriott-Starwood merger

Little known insurer Chinese Anbang is on a major shopping spree in the US hotel sector - going toe-to-toe with big players like Marriott. This time it has its sights on Starwood, owner of brands including Sheraton.

China's Anbang Insurance Group is on a shopping spree in the US hotel sector. After its headline-making 2014 purchase of New Yorker institution Waldorf Astoria, the little-known insurance company is making a $13 billion (11.7 billion euro) play for Starwood Hotels and Resorts Worldwide - threatening to upset an already planned takeover from Marriott International.

Starwood confirmed on Monday that it received an offer valued at $76 per share from the Anbang-led consortium, which beats Marriott's finalized cash-and-stock offer of $63.74 - totaling $12.2 billion - from November. Shareholders of Marriott and of Starwood, which owns Sheraton, Westin, and St. Regis hotels, are expected to vote on the deal on March 28.

Deal creating world's largest hotel chain threatened

A takeover by Marriott - which owns brands including The Ritz-Carlton, JW Marriott and Gaylord hotels - would have created the world's largest hotel chain, with 5,500 properties and more than 1.1 million rooms. The merger would have also put the resulting company in a better position to negotiate commissions with online travel agencies like Expedia and Priceline.

Anaheim Marriott Hotel

Marriott sticking to planned merger with Starwood

Marriott issued a statement saying it "reaffirmed its commitment" to buy Starwood.

If Starwood decides to back away from the deal with Marriott, or withdraws its recommendation for shareholders to vote in favor of the sale to Marriott, Starwood would be hit with a $400 million termination fee.

While Starwood said its board of directors hadn't changed its recommendation in support of the Starwood-Marriott merger, it was "carefully" considering discussions with the Anbang consortium before deciding on further action. It stated there were a "number of matters" to be settled in the consortium's proposal.

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Chinese shop for business assets

Part of a larger shopping spree

As news of Anbang's bid for Starwood broke, reports surfaced that the Chinese company is also buying US luxury hotel group Strategic Hotels and Resorts for $6.5 billion from The Blackstone Group - gaining Anbang 16 upscale hotels and resorts in the US. Sources told AFP that the transaction could be announced in the following days.

US companies have become hot-ticket items for Asian companies, as they're viewed as safer havens, as especially the Chinese economy shows signs of slowing. And the US hotel industry itself has just seen its best year - occupancy and average night room rate were at all-time highs in 2015.

jd/uhe (AP, AFP)

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