China's HNA Group is set to acquire 25 percent of Hilton Worldwide in a deal valued at approximately $6.5 billion, the McLean, Virginia-based hotel company announced Monday.
HNA will acquire the 25 percent equity interest in Hilton and its planned spin-offs of Park Hotels & Resorts and Hilton Grand Vacations from affiliates of the Blackstone Group. The transaction is expected to close in the first quarter of 2017 and will reduce Blackstone's interest in Hilton to about 21 percent.
HNA has entered into stockholders agreements with all three aforementioned Hilton companies, allowing it to appoint two directors to Hilton's Board of Directors. Blackstone will maintain its two seats on the board.
"HNA Group has a broad portfolio of successful travel and hospitality businesses and a proven track record of creating value in this industry," Hilton's president and CEO Christopher J. Nassetta said in a statement accompanying Monday's announcement. "We believe this mutually beneficial relationship will open new opportunities for our brands and guests around the world, particularly in light of HNA's strong position in the fast-growing Chinese travel and tourism market, the largest outbound travel and tourism market in the world."
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"This investment is consistent with our strategy to enhance our global tourism business, and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms to provide travelers more choice, value and world-class services," said HNA Group's vice chairman and CEO Adam Tan in a statement.
HNA's investment is the latest in the emerging trend of Chinese investment in overseas hotel and travel businesses and comes just one week after a group of investors led by China Life Insurance Co. Ltd. agreed to invest $2 billion into Starwood Capital Group's portfolio of U.S. hotels.
The deal comes only six months after HNA Tourism Group, a unit of HNA, agreed to acquire U.S.-based Carlson Hotels and its 51.3 percent majority stake in the Rezidor Hotel Group.
"We think the company's future is bright, and this long-term investment from HNA Group only adds to its potential," said Hilton Board of Directors chairman Jon Gray.
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