HNA slows M&A pace after US$50b buying spree in past 2 years
As the global market is increasingly complicated, the HNA Group will slow down in making acquisitions, having amassed overseas assets to make up 30% of its portfolio that contribute to half of the group’s revenue.
Having made acquisitions to the tune of US$50 billion since 2015, the HNA Group plans to slow the pace. The group’s CEO Xiangdong Tan told Reuters that a key factor for that decision was the increasingly complicated global scene, especially in Sino-US relations.
However, acquisitions will be ongoing, albeit in a slower pace, as the pricing of overseas assets is still attractive vis-à-vis China’s assets, and low-cost capital is readily available, he said.
He revealed that 30% of the group’s assets are in overseas and they contribute to half of the group’s incomes, giving the group a critical mass to leverage overseas organizational structures to carry on with mergers and acquisitions.
There are signs that not only the HNA Group is slowing its pace in making overseas purchases.
The Financial Times has reported that Fosun International and Anbang Insurance Group were among those with bigger appetites for acquisitions and had spent some time in identifying potential targets.
However, tightening regulatory control on transactions over US$5 million is making it more challenging to get approval for non-strategic assets such as real estate, while the depreciating yuan is making overseas transactions costlier.
In the past year, the HNA Group has been snapping up overseas asses, at the rate of one major purchase every month. Some of its diverse acquisitions include:
February 2016, acquisition of US technology company Ingram Micro for US$6 billion.
April 2016, acquisition of Swiss inflight catering company Gategroup for US$1.5 billion.
April 2016, announcement of agreement to purchase UK currency exchange operator International Currency Exchange, one of the world’s largest retail currency exchange operator.
April 2016, HNA Tourism Group reached agreement to acquire Carlson Hotels as well as 51.3% holdings of Rezidor Hotel Group held by Carlson.
July 2016, acquisition of ground service company Swissport for US$2.8 billion.
July 2016, acquisition of New York listed aircraft leasing company Avolon for US$2.5 billion.
October 2016, group subsidiary Avolon Holdings agreed to acquire the aircraft leasing business of CIT Group Inc, for US$10 billion.
October 2016, HNA became the largest shareholder of the Hilton Group after taking 25% holdings for US$6.5 billion.
March 2017, HNA bought 80% of the owning company of Caijing magazine for a rumoured sum of RMB 8.8 million or more
March 2017, the group acquired a site on Hong Kong’s Kai Tak area for HK$7.44 billion, the fourth site in Kai Tak acquired by the group in five months in a HK$27.2 billion land acquisition streak.
March 2017, US media reported that the group bought a building at 245 Park Ave. in Manhattan for US$2.2 billion. It was said to be one of the highest-valued deals of New York skyscrapers.
March 2017, the group became the third largest shareholder of Deutsche Bank AG after increasing its holdings to 4.76%
April 2017, the group’s financial arm bought 51% of the fuel storage and logistics business of Glencore for US$775 million
May 2017, the group became the biggest shareholder of Deutsche Bank after increasing its holdings to 9.92%
May 2017, the group is reported to have made a US$2 billion bid for Value Partners.