Get the app today! Download iPhone App Download Android App

Radisson Hotel Owner to Be Sold to China's HNA Tourism Group

Published on Apr 28 2016 10:11 AM in Hotel tagged: hotel / starwood / radisson

Radisson Hotel Owner to Be Sold to China's HNA Tourism Group

A unit of China's HNA Group agreed to buy closely held Carlson Hotels, gaining brands including Radisson and Park Plaza as the global lodging industry consolidates.

HNA Tourism Group will acquire Carlson and its 51.3 per cent stake in Rezidor Hotel Group, Carlson’s Brussels-based master licensee for Europe, the Middle East and Africa, and may begin a takeover offer for all of Rezidor, the companies said in a statement Wednesday. Financial terms of the transaction weren’t disclosed. Carlson’s hotel group could fetch about $2 billion in a sale, people with knowledge of the matter said in March.

The HNA acquisition is part of a wave of Chinese investment in overseas hotel properties and brands. Beijing-based Anbang Insurance Group made a surprise $14 billion bid for Starwood Hotels & Resorts Worldwide in March before walking away unexpectedly three weeks later, enabling Marriott International to proceed with a takeover. Had Anbang bought Starwood, it would have been the biggest acquisition of a US company by a Chinese buyer. In 2015, HNA acquired a 15 per cent stake in Red Lion Hotels, an owner of mid-scale and full-service US hotels.

Carlson Hotels has 1,400 properties with more than 220,000 rooms under operation and development in 115 countries and territories. Besides Radisson, Radisson Blu and Radisson Red, the company owns the Quorvus Collection, Park Inn by Radisson, Country Inns & Suites by Carlson and the Club Carlson frequent-guest program.

Invest ‘Substantially’

“Combining with HNA Group provides Carlson Hotels with financial resources and international breadth and depth to accelerate growth,” David P. Berg, who will stay on as chief executive officer of Carlson’s hospitality division, said in an e-mailed statement. Carlson Hotels “has been performing very well,” he said. “The larger economics of the industry, though, are changing by the day. The Carlson family believes this decision is the best way to position the business for sustainable long-term success and remain true to the family legacy.”

The combined HNA and Carlson plan to boost spending in areas such as technology, owned assets in major gateway cities, and the building of Radisson Red and other new brands, the companies said in the statement. HNA plans to invest “substantially” in the business to accelerate growth.

Under Swedish takeover rules, HNA Tourism is required to make a tender offer for the remaining 48.7 percent of Stockholm-listed Rezidor within four weeks of the transaction being completed, if HNA doesn’t reduce its stake in Rezidor to less than 30 percent before then, according to the statement. The public tender offer would be at the 20-day, volume-weighted average price before the announcement.

HNA joins other companies from its home country on a shopping spree for foreign businesses amid increasing overseas travel by Chinese and concern about yuan devaluation. China has urged its companies to expand outside the country, resulting in $97 billion of deals in the first quarter, according to data compiled by Bloomberg. HNA in February bought airport luggage handler Swissport International Ltd. for 2.73 billion Swiss francs ($2.81 billion). HNA, owner of China’s fourth-largest airline, also was a bidder for London City Airport, losing out to a group led by Ontario Teachers’ Pension Plan Board.

HNA is the biggest shareholder in Spanish hotel company NH Hotel Group SA. It has agreed to buy a stake in a Brazilian airline, Azul Linhas Aereas Brasileiras SA.

Curt Carlson, grandfather of current board chair Diana Nelson, founded Carlson Hotels in 1938. HNA Tourism has pledged to maintain the headquarters in the Minneapolis suburb of Minnetonka, according to the statement.

News by Bloomberg, edited by Hospitality Ireland

Share on Facebook Share on Twitter Share on Google+ Share on LinkedIn Share on Tumblr Share via Email