Business / Companies

Anbang Insurance pulls out of Starwood hotel bidding

By Cai Xiao (China Daily) Updated: 2016-04-02 02:51

Anbang Insurance pulls out of Starwood hotel bidding

A logo sign outside of the headquarters of Starwood Hotels and Resorts Worldwide Inc in Stamford, Connecticut, the US, November 20, 2015. [Photo/IC]

Anbang Insurance Group Co has announced that it has abandoned its $14 billion bid for Starwood Hotels & Resorts Worldwide Inc.

The Chinese company said in a statement released in the United States on Thursday that it would not proceed with a consortium — including J.C. Flowers & Co and Primavera Capital — to buy Starwood because of various market considerations. Analysts said price and regulators' attitudes may have played a significant role in the decision.

Starwood shares fell 0.27 percent to $83.43 on Thursday, while shares of Marriott Hotels & Resorts, which was competing with Anbang to acquire Starwood, fell 0.52 percent to $71.18.

Tian Bo, a spokeswoman for Anbang, confirmed the decision but offered no further information.

Fred Hu, chairman of Primavera, told Reuters in an e-mail that the reason for the withdrawal was that Anbang wasn't interested in a protracted bidding war.

Huang Peng, a partner at Beijing-based Guantao Law Firm who specializes in cross-border deals, said Anbang's decision showed that Chinese enterprises have been more mature when going abroad.

"A bidding war is not good for buyers, and I believe Anbang and its partners abandoned the $14 billion bid based on reasonable business judgment," Huang said.

Alan Wang, a partner at international law firm Freshfields who has also closely followed the bidding, said price considerations may be a reason for Anbang calling it quits.

"To finish the deal, Anbang should guarantee that funds are well financed and remitted smoothly. The company will think twice when the amount is huge," Wang said.

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