China: HNA Tourism acquires Carlson Hotels

Visual of HNA Group website. April 2016.

HNA Tourism Group, a division of HNA Group Co., Ltd., a Fortune Global 500 company with interests across aviation, tourism, hospitality, finance, and online services, among other diverse sectors, is acquiring Carlson Hospitality Group, Inc.

Financial terms of the investment were undisclosed, though Bloomberg stated in March that Carlson could potentially reach a capitalisation of US$2 billion. The company is the hospitality arm of Carlson Wagonlit Travel.

The deal will see HNA Tourism acquire brands associated to Carlson Hotels, Inc., which owns the Quorvus Collection, Radisson Blu, Radisson, Radisson RED, Park Plaza, Park Inn by Radisson, Country Inns & Suites By CarlsonSM brands and the Club CarlsonSM global hotel rewards program.

This will nearly quadruple its number of hotels globally, as well as add the Radisson, Park Plaza, Country Inns & Suites brands to its brand portfolio. This acquisition will also see the addition of 1400 hotels in 115 countries, significantly expanding HNA’s current portfolio of 500 hotels.

To date, announced outbound Chinese mergers and acquisitions (M&A) have reached US$94.8 billion, compared with $103.6 billion for 2015, according to Thomson Reuters data.

Carlson Hotels is amongst the largest hotel groups globally, with 1400 hotels in operation and under development with more than 220,000 rooms and a footprint spanning 115 countries and territories. The acquisition of these assets will see HNA Tourism Group and Carlson Hotels develop an increased ability to accelerate growth through investments in areas such as digital, owned assets in major gateway cities.

Meanwhile, HNA Tourism Group is an integrated tourism conglomerate with a global presence based in Beijing and a majority investor in travel and hospitality brands such as NH Hotels, Red Lion Hotels, and PVCP Group.

According to HNA Tourism Group, the deal will see them preserve maintain its headquarters in Minnetonka, Minnesota, as part of Carlson’s values, heritage and community connections, following the acquisition.

As part of the acquisition, Berg will remain the CEO of Carlson Hospitality. Advisors for this were Morgan Stanley and BDT & Company, who served as financial advisors. Legal advisors for Carlson Hotels in the deal were Freshfields Bruckhaus Deringer LLP, and Advokatfirman Vinge KB, while HNA Tourism Group engaged J.P. Morgan and Benedetto, Gartland & Company as financial advisors and Hogan Lovells and Advokatfirman Lindahl KB as legal advisors.

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Commenting on the acquisition, David P. Berg, CEO of Carlson Hospitality Group, shared: “Carlson Hotels own a powerful set of global brands and this historic agreement provides tremendous opportunities for growth. We look forward to working within HNA Tourism Group, a greatly respected global enterprise, in what will be an exciting new chapter in the history of Carlson Hotels.”

The acquisition was unanimously approved by the Carlson board of directors, with HNA Tourism Group will acquire all of Carlson Hotels, including its approximately 51.3 per cent majority stake in Rezidor Hotel Group AB, Carlson Hotel’s master licensee based in Brussels. This firm maintains hotels in Europe, the Middle East and Africa.

As per Swedish takeover rules, HNA Tourism Group is obliged to launch a mandatory public tender offer for the remaining approximately 48.7 per cent of Rezidor within four weeks of the acquisition, if the ownership in Rezidor is not sold down below 30 per cent.

This requires HNA Tourism Group to decide whether to launch a mandatory public tender offer for the remaining shares in Rezidor or sell down its ownership in Rezidor below 30 per cent.

Should HNA launch a mandatory public tender offer, as per regulations from the Swedish Securities Council, the minimum price in such mandatory tender offer would be the 20-trading day volume weighted average price (VWAP) immediately before the announcement of the signing of the acquisition agreement, which is dated 27 April 2016. Subject to regulatory approvals and other customary closing conditions, the takeover deal is expected to close in 2H 2016.

Bai Haibo, a board member of HNA Tourism Group’s concurrently the CEO and chairman of HNA Hospitality Group, commented: “Carlson Hotels’ global success and strong, sustainable growth potential is a testament to their world-class brands, continuous innovation, excellent management, and unique employee-focused culture, all of which we will build upon as part of this combination to establish our presence in the U.S. market and expand our footprint in hospitality internationally.”

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.