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Outbound Chinese investment to U.S. falls to 7-year low

01/17/2019| 9:32:10 AM|

Over the year, Chinese investors like Anbang Insurance, Dalian Wanda, Fosun International and HNA Group dropped at least $13 billion of U.S. assets with some headline-making deals.

More than a year after the country's August 2017 crackdown on outbound investment, direct investments from China to the United States dropped to $4.8 billion in 2018, down 84% from $29 billion in 2017 and 90% from $46 billion in 2016. According to New York-based research firm Rhodium Group, it was the lowest level in seven years.

Forbes magazine attributed the drop to both the restrictions on investment and the current trade war between the two nations. Over the year, Chinese investors like Anbang Insurance, Dalian Wanda, Fosun International and HNA Group dropped at least $13 billion of U.S. assets with some headline-making deals.

HNA agreed to sell its holdings in Radisson Hospitality AB and Radisson Holdings to a consortium headed by Jin Jiang International Holdings, which is controlled by the Shanghai government. At the time, Bloomberg estimated HNA could earn at least $2 billion from the sale. HNA also sold its shares in Hilton and its spinoffs for a combined $8.5 billion in the spring, and began unloading its shares in Spain's NH Hotel Group to Thailand’s Minor International in a transaction valued at €619 million. 

In August, Anbang put up for sale a luxury hotel collection it acquired two years ago, pricing it at $5.5 billion, looking to raise money following its seizure by the Chinese government in February. By September, Las Vegas’ Lockwood Development Partners was working with a number of unspecified hotel franchisees to take some of those assets, but the fate of New York City's Waldorf-Astoria Hotel (acquired by Anbang for $1.9 billion in 2014) was still up in the air, making the property's three-year, $2 billion renovation all the more difficult. 

Last spring, Dalian Wanda Group dropped its partnerships with foreign hotel operators, including Hyatt, IHG, AccorHotels Group and Hilton, to focus on building its own hotel brands. 

Rhodium Group estimates another $20 billion in China divestitures of U.S. assets is still pending, but global research group Mergermarket suggests the number could be higher. Anbang reportedly hired Bank of America to advise on the sale of its remaining U.S. hotel portfolio, worth an estimated $10 billion. HNA, meanwhile, has hired China Development Bank to advise on the sales of its foreign assets (including hotels, real estate and airlines), which could amount to $50 billion.

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TAGS: HNA | Anbang | Wanda
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