01 December 2016

Anbang in the headlines

Anbang Insurance is the acquisitive holding company that not only has an opaque ownership structure but has also hit the headlines numerous times recently. The Chinese conglomerate is pursuing a goal of globally diversifying its sprawling insurance, banking and financial activities to include foreign investments in hotels and other overseas properties, among other things.

In so doing, it has reportedly raised flags for concern among regulators and investors alike as its murky structure, which is believed to include links to the Chinese government, makes it difficult to identify the actual buyers behind its major acquisitions and to assess the risks relating to these deals.

Anbang’s buying spree has included deals for New York’s marquee Waldorf Astoria (USD 1,950 million) in 2014 and, according to the M&A database published by Bureau van Dijk, the bulk of the assets that made up Strategic Hotels and Resorts earlier this year (USD 6,500 million). It also comprising the failed attempt to scupper an acquisition of Starwood Hotels and Resorts Worldwide by Marriot International by tabling a rival bid set at a daring USD 13,960 million.

So far this year it almost seems as though Anbang has rarely been out of the news, with reports emerging in August the financial conglomerate is considering kicking off an initial public offering in Hong Kong after asking banks to pitch for a role on the listing that may well bring some transparency to the group’s ownership structure while fuelling a war chest with fresh equity to fund further expansion, potentially both at home and abroad.

So, another month, another potential deal, as reports emerged in the middle of November that Anbang is in advanced discussions to acquire a portfolio of Japanese properties from Blackstone in a USD 2,300 million-deal that would mark its first incursion into the country’s real estate sector.

However, the news came on the heels of a Bloomberg article suggesting Canada is now in the acquisitive conglomerate’s crosshairs as it manoeuvers to buy an office and retail tower located in downtown Toronto from closely-held development and investment group Canderel and pension fund manager OPTrust for at least USD 395 million.

Low and behold, news has since emerged Angbang is manoeuvring to make an investment in Canada, specifically, hoping to enter the country’s healthcare system. The Globe and Mail first reported the overseas giant has incorporated a local subsidiary, Cedar Tree Investment Canada, which has already got the ball rolling on a CAD 1,000 million (USD 744 million) purchase of a majority stake in Vancouver-based Retirement Concepts, billed as one of British Columbia’s largest retirement home chains.

While the companies declined to comment on the reported value, it is large enough to cross the CAD 600 million-threshold that automatically triggers a review by the federal government’s Investment Review Division. Furthermore, the newspaper reported there is growing opposition to the deal which would give Anbang a significant role in British Columbia’s healthcare system, with a patient-advocacy group calling on the federal government to review the acquisition with caution or even to reject it outright.

For a company that has hit the headlines with blockbuster deals, both completed and aborted, the Globe and Mail noted Anbang is keeping this latest investment close to its chest. So, with just a month left before we usher in 2017, there is still plenty of time left for Anbang to make inroads on its global diversification.

© Zephyr