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HNA gives up bid to build hotel empire with Radisson sale
[HONG KONG] Up until last year, China's HNA Group Co was one of the hottest names in the global hospitality industry. What began in 2013 with an investment into Spain's NH Hotel Group SA soon spread to top shareholdings in the companies behind Hilton, Rezidor and Carlson hotels.
But the conglomerate's ambitious plans have unravelled faster than the acquisitions. This year alone, HNA sold out of Hilton Worldwide Holdings Inc and its spinoffs for a combined US$8.5 billion, and began unloading its NH shares to a Thai group. The disposal of its last global chain - Radisson, the hotels that formerly operated under the Rezidor and Carlson brands - was announced hours ago to a fellow Chinese company.
HNA's rise and fall as a hotelier shows how suddenly the company's ambitions have changed from its empire-building days, when it expanded beyond its means by gobbling up everything from big stakes in Deutsche Bank AG to skyscrapers in Manhattan. It's part of a broader retreat for the Chinese conglomerate, which has sold more than US$17 billion in assets this year to lower one of the country's biggest corporate debt piles.
During its rise, HNA was said to be among companies that considered a bid for Starwood Hotels & Resorts Worldwide Inc, owner of the Westin hotel brand.
To be sure, HNA will still operate hotels under the Tang and Tangla brands, but they're mainly scattered across China, according to its website.
In its latest sale, HNA agreed to sell its holdings in Stockholm-listed Radisson Hospitality AB and closely held Radisson Holdings Inc to Jin Jiang International Holding Co, which is controlled by the Shanghai government and owns 12 per cent of France's Accor SA. Though total value of the sale wasn't disclosed, Bloomberg reported earlier this month that Radisson could fetch at least US$2 billion.
The purchase would make Jin Jiang the seventh-biggest hotel company in the world, with 344,000 rooms, according to lodging-data provider STR.
HNA acquired its stake in Radisson in 2016 and oversaw an aggressive strategy to update its brands, implement new booking and revenue-management technology, and expand its pipeline of development deals. In a statement, John Kidd, chief executive officer of Radisson Hospitality, said he is hopeful those efforts would continue under the new ownership.
"HNA has been extremely supportive of our business," Mr Kidd said. "Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang International to join one of the largest hotel companies in the world."