China’s Anbang: From auto insurance roots to global buyer of luxury hotels
China’s Anbang Insurance Group Co has emerged from near obscurity 18 months ago to sign deals worth more than $30 billion, moving into the big league of global real estate and finance.
The Beijing-based firm has offered $12.8 billion for U.S. hotel operator Starwood (HOT.N) and also agreed this month to pay Blackstone Group (BX.N) $6.5 billion for Strategic Hotels & Resorts Inc, whose 16 luxury properties include the Four Seasons Washington D.C.
Established in 2004 as an automotive and property insurer by chairman Wu Xiaohui, a native of China’s entrepreneurial coastal city Wenzhou, Anbang is looking to use its 1.65 trillion yuan ($253 billion) in assets to transform into a worldwide investor.
“Anbang will have a global footprint. In 10 years, Anbang will have companies on all the world’s continents,” Wu, who is 49 and married to Deng Zhuorui, a granddaughter of Chinese patriarch Deng Xiaoping, told students at Harvard University last year.
Business associates describe Wu as passionate, impatient and very ambitious. He often travels by private jet accompanied by a retinue of assistants.
His acquisition strategy is underpinned by an aggressive pursuit of yield-producing companies, those business associates say, funded by cash from selling insurance products and other sources.
In October 2014, Anbang agreed to pay $1.95 billion for the Waldorf-Astoria Hotel in New York, a move Wu said brought the insurer “extra brand recognition” and business opportunities.
Last year, Anbang agreed to buy U.S. insurer Fidelity & Guaranty Life (FGL.N) for $1.6 billion, and paid around $1 billion for South Korea’s Tong Yang Life Insurance Co (082640.KS). It has also bought control of Fidea, a Belgium based insurer, and the Belgian banking operations of Dutch insurer Delta Lloyd. It is in talks to buy Allianz’s (ALVG.DE) South Korean operations.
At home, Anbang has a leading stake in China Minsheng Banking Corp Ltd (600016.SS)(1988.HK), the country’s biggest private lender, and is a significant shareholder in China Vanke Co (000002.SZ)(2202.HK), the largest residential property developer. Read more