3 Chinese companies eye US hotel chain operator Starwood

By SHI JING/WANG WEN (China Daily) Updated: 2015-10-29 07:25

The view of The Westin Hotel, a brand of Starwood Hotels, off Times Square on October 17, 2007 behind the construction site for the Eleven Times Square skyscraper. Three Chinese companies, Shanghai Jin Jiang International Hotels, HNA Group and the China Investment Corp. are seeking approval from Beijing to bid on an acquisition of Starwood Hotels. [Photo/IC]

"Jin Jiang is moving toward its goal of becoming a leading mega hotel group in the world," said Li Yuebo, a senior analyst at Fuzhou-based Industrial Securities Co.

Jin Jiang has been expanding its presence at home and abroad in the past few years. On Friday, it said it was buying about 81 percent of Keystone Lodging Holdings Ltd for more than 8.26 billion yuan. Keystone Lodging is wellknown for its budget hotel chain such as 7 Days. With this acquisition, Jin Jiang became China's biggest hotelier and moved into the global top five.

Earlier this year, Jin Jiang acquired Europe's second-largest hotel group Groupe Du Louvre for up to 1.21 billion euros ($1.33 billion).

"Acquisitions are the best way for hotel groups to expand abroad as they enable the brand to be known to a larger group of consumers. With more Chinese tourists making overseas trips every year, the hotelier is sure to benefit from the acquisition," Li said.

Li Lei, deputy director of the securities research institute of Minzu Securities Co Ltd, said: "HNA Group is also completing its industry chain globally through acquisitions, including aviation, airport management, logistics and tourism. To reduce business risks, the group has been expanding into related industries through overseas acquisitions, such as aircraft leasing and hotels."

HNA Group acquired a 29.5 percent share in NH Hotels, a Spanish hotel chain, and became its largest shareholder in 2014. The group also purchased a landmark office building in Canary Wharf, a financial district in London, in September.

Xia Yangyang, director of international capital at global property company JLL, said acquisitions are an ideal option for Chinese investors to diversify their global investments and reduce risks.

JLL is expecting China's outbound investment into real estate to reach $20 billion by the end of this year, up from $16.5 billion in 2014.