Aiming Hainan

3 April 2017 By Quentin Webb

The Chinese travel firm has snapped up land, hotels, leasing firms and even part of Deutsche Bank. These are just opening gambits by an outfit aspiring to own trillions of dollars in assets. Diversifying is all well and good – provided it does not end in a hard landing.

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Companies backed by China's HNA Group have spent tens of billions of dollars on overseas mergers and acquisitions in the last two years. The biggest deal was the $10.1 billion purchase of an aircraft-leasing business from CIT. Other major deals include the $6.5 billion purchase of 25 percent of Hilton Worldwide; the $6.3 billion takeover of U.S. computer wholesaler Ingram Micro; and the $2.8 billion acquisition of cargo-handling firm Swissport International.

In real estate, a unit of HNA agreed to buy 245 Park Avenue in Manhattan for $2.2 billion, Reuters reported on March 21, citing a source familiar with the transaction. It has also spent HK$27.2 billion ($3.5 billion) since November buying four plots of land in Hong Kong's Kai Tak area, where it plans to build a "world-class integrated residential complex".

In finance, HNA has amassed a 4.76 percent stake in Deutsche Bank in two stages since February. The stake was worth about $1.1 billion as of March 31's close, Eikon data shows. On March 26, it agreed to buy 24.95 percent of Old Mutual's U.S. subsidiary, Old Mutual Asset Management, in a two-part deal worth $446 million.

HNA is in talks to buy a controlling stake in the owner of the publisher of Forbes magazine, in a deal worth at least $400 million, Reuters reported on March 28, citing two sources with knowledge of the matter. Hong Kong-based Integrated Whale Media Investments, which holds 95 percent of Forbes Media, is also in talks with another Chinese entity, and is scouting for more potential buyers, Reuters added.

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