China's Anbang: from auto insurance roots to global buyer of luxury hotels

TONGYANG Life Insurance

15/03/2016 10:58

* Anbang assets doubled to $253 bln since end-2014 
    * Commits to $30 bln in buyouts in last 18 months 
    * Starwood bid follows $6.5 billion luxury hotels deal 
    * Founder Wu Xiaohui seeking to transform local insurer 
 
    BEIJING, March 15 (Reuters) - 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   urn:newsml:reuters.com:*:nL3N16M3D4 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.  urn:newsml:reuters.com:*:nL1N16K0OQ 
    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.  urn:newsml:reuters.com:*:nL3N1631E8 
    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. 
     
    CONNECTIONS 
    When he set up Anbang, Wu enlisted a small consortium of 
private and state investors led by Shanghai Automotive Industry 
Group Corp, the parent of a government-owned automaker that has 
ventures with General Motors  GM.N  and Volkswagen  VOWG.DE . 
State-owned China Petrochemical Corp later bought a stake. 
    Anbang's original board included Levin Zhu, former CEO of 
China International Capital Corp and son of former premier Zhu 
Rongji, and Long Yongtu, China's chief negotiator when it joined 
the World Trade Organization. Wu also turned to Chen Xiaolu, a 
son of Chinese Marshal Chen Yi, for support. 
    Anbang holds licenses for selling property, life and health 
insurance, and operates an annuity insurance business and asset 
management arm. It doesn't publish group finances, but says its 
assets have more than doubled since December 2014. 
    Two subsidiaries, Anbang Life Insurance and Anbang Annuity 
Insurance, raised 49 billion yuan ($7.53 billion) in investment 
funds last year, mainly through selling high-yielding universal 
life insurance policies. 
    ($1 = 6.5056 Chinese yuan renminbi) 
 
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Anbang shopping spree    http://tmsnrt.rs/1pI1os9  
Top 10 hospitality deals     http://tmsnrt.rs/1XqTRsv 
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 (Reporting by Matthew Miller and Michelle Price; Editing by Ian 
Geoghegan) 
 ((matthew.miller1@thomsonreuters.com;)) 
 
Keywords: STARWOOD HOTELS M&A/ANBANG PROFILE