A Hilton property in the Dallas suburb of Southlake, TX.
McLEAN, VA—Hilton Worldwide Holdings Inc. said Monday that HNA Group would acquire a 25% equity interest in Hilton from affiliates of the Blackstone Group. Valued at approximately $6.5 billion, the deal represents Beijing-based HNA's second entity-level venture into hotel companies in the past six months, and Blackstone's third major domestic lodging transaction with Chinese investors.
HNA's acquisition of a Hilton stake represents a long-term strategic investment in Hilton itself as well as its planned spin-offs of Park Hotels & Resorts and Hilton Grand Vacations, which are scheduled to close by the end of this year. Following the closing of the equity interest sale, HNA will own a 25% stake in all three companies.
This past April, HNA agreed to acquire Carlson Hospitality Group, owner of the Radisson hotel brand, including its majority ownership of Rezidor Hotel Group. Terms were not disclosed.
Christopher J. Nassetta, president and CEO of Hilton, cites HNA Group's “broad portfolio of successful travel and hospitality businesses and a proven track record of creating value in this industry. We believe this mutually beneficial relationship will open new opportunities for our brands and guests around the world, particularly in light of HNA's strong position in the fast-growing Chinese travel and tourism market, the largest outbound travel and tourism market in the world.”
HNA vice chairman and CEO Adam Tan says the acquisition of a Hilton stake 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 to provide travelers more choice, value and world-class services.” The agreement gives HNA the right to appoint two directors to Hilton's board, including one HNA member and one independent.
Expected to close in the first quarter of 2017, the sale of an equity interest to HNA will reduce Blackstone's Hilton stake to 21%. In separate transactions, Blackstone sold the iconic Waldorf-Astoria in early 2015 to Anbang Insurance Group for $1.95 billion, and earlier this year sold Strategic Hotels & Resorts to Anbang for $6.5 billion just three months after taking the lodging REIT private.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
