HNA Produces Strategic Asset in Hilton

HNA Produces Strategic Asset in Hilton


The HNA Group is well branded as a Fortune Global 500 company headquartered in China with businesses spanning across aviation, holding, tourism, capital, and logistics in regards to its latest occurrences the Chinese Aviation has well acclaimed that it is going forth and purchasing a wager of approximately 25% in the Hilton, which is a garden inn and hotel. There are many located worldwide. The HNA Group is purchasing from the largest shareholder known as Blackstone for a chart topping $6.5 billion.

The Blackstone Group focuses on such matters as real estate and private equity. It is evident why the HNA Group is investing in the Hilton as its shares have increased to 6.3 percent at $24.35, which was acclaimed on Monday. The Hilton will maintain a value of approximately $26 billion while the HNA group purchase the wager at $26.25 per share, which amounts to 14.6 percent.

With this deal in action this will decrease Blackstone’s desire in Hilton to about 21%.  Big changes are coming for Hilton as they are set to break away into three separate chains. Doing this will make its hotels into a real-estate asset dependence, which in addition break apart its timeshare business. The HNA group will do well for itself by owning 25% of all three companies, which will be set in stone in the first quarter of 2017.

This arrangement means that the HNA group will be granted to bring in new members to the team. This includes one HNA member and an autonomous member. The HNA Group has been in talks of purchasing Hilton for a while now, and they plan to make it a long-term investment. But it is not only the HNA Group that has shown interest in real estate companies; many other Chinese associations, most prominently insurers.

For example, Starwood Capital Group sold about $2 billion worth of U.S. hotels to China Life Insurance Co. Ltd.  In addition, Anbang Insurance Group Co. paid $2 billion for the Waldorf Astoria hotel in Manhattan. As we can see many deals and arrangements have occurred with real estate hotels, as they are a hot market to purchase.

Without a doubt, HNA group has been very proactive and busy in 2016. Prior to this event it purchased a 100% take in U.S. based Carlson Hotels Inc in April and to add even more, it also is claiming to purchase a $6 billion asset of Ingram Micro (A distributor of computer and technology products) for $4 billion.

To end things off, here are some figures of Hilton Worldwide, which represents its growth and popularity. The Hilton welcomed over 140 million visitors to its 4,600 properties around the world (which includes owned, managed and franchised hotels and timeshare properties). In 2015, Hilton signed over 100,000 new rooms for progress, creating a global pipeline of 275,000 hotel rooms. 50 % of these are currently under construction, and represent almost 20% of the total hotel rooms under construction globally.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities. I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.