Why HNA is putting the brakes on deals

Company targeting fewer acquisitions as Chinese regulators try to get a handle on debt

New York /
Jul.July 14, 2017 02:20 PM

HNA Group, one of China’s biggest conglomerates and the new owner of the trophy office tower at 245 Park Avenue, has put a freeze on merger-and-acquisition deals as Chinese officials crack down on debt to curb overseas investments.

People familiar with HNA’s strategy told the Wall Street Journal that the company said it is putting M&A activity on hold for now. Another person familiar with the plans told the newspaper that the company is targeting fewer deals and holding fewer talks about potential acquisitions.

HNA is, however, still talking about investing in asset-management firms and financial institutions.

In June, the China Banking Regulatory commission started investigating five big Chinese international investors as it tried to control debt levels.

The companies included HNA along with Anbang Insurance Group, Fosun International and Dalian Wanda Group.

HNA is one of China’s biggest spenders, and made a big splash in New York City in March when it went into contract to buy 245 Park Avenue for $2.21 billion, as The Real Deal first reported. Last year, the company paid $6.5 billion to buy a 25 percent stake in Hilton Worldwide Holdings.

Outbound Chinese investments have fallen off sharply this year after Chinese regulators made a push last year to stem the flow of spending abroad. A recent report from Juwai predicted that Chinese investment in U.S. real estate will likely continue to fall in 2017.

So far this year, HNA has announced $5.66 billion worth of overseas deals. The company is now the largest shareholder in Deutsche Bank after borrowing $3 billion to buy a larger stake, and is trying to expand in the financial services sector.

Overseas spending by Chinese companies in sectors outside finance in the first half of the year dropped 45.8 percent year-over-year to $48.19 billion, according to Ministry of Commerce data cited by the state-run Xinhua News Agency. [WSJ]Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Pastor Gregory Fryer and the Immanuel Lutheran Church at 120 and 122 East 88th Street (Getty Images, Immanuel NYC, Jim.henderson, CC0, via Wikimedia Commons)
Thou Shalt Not Sell: Lutheran group sues to stop church’s deals
Thou Shalt Not Sell: Lutheran group sues to stop church’s deals
From left: Jay Suites' Juda Srour and 104 West 40th Street; Convene's Phoenix Porcelli and 101 Park Avenue (LoopNet, LinkedIn/Phoenix Porcelli, 101Park.com)
Back-to-meetings spurs demand for flex space
Back-to-meetings spurs demand for flex space
Related Companies founder Stephen Ross and 33 Hudson Yards (Getty Images, LoopNet)
Related eyeing sale of Equinox Hotel
Related eyeing sale of Equinox Hotel
RJBlock Properties' Rodney "RJ Block" Jackson and 2714-2718 Frederick Douglass Boulevard (RJBlock Properties, Apartments.com, Getty Images)
I-sales roundup: RJ Block buys Harlem mixed-use portfolio
I-sales roundup: RJ Block buys Harlem mixed-use portfolio
From left: Colony Hills’ Glenn Hanson and Rosewood’s Jonathan Brody with The Royce at Trumbull (Getty, Royce at Trumbull, LinkedIn, Rosewood)
Investors sell Trumbull apartments for $101M, 23% markup from last year
Investors sell Trumbull apartments for $101M, 23% markup from last year
Street Partnership's Dan Biederman with Herald Square
“We’re not alarmed:” Herald Square retail in reverse
“We’re not alarmed:” Herald Square retail in reverse
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...