The Chinese insurer Anbang got quite some attention with efforts to purchase the Waldorf Astoria (US$1.9 billion), Blackstone (US$6.5 billion) and Starwood (US$14 billion). Worries that Anbang cannot meet its obligations are overblown, tells business analyst Shaun Rein to the BBC.
Shaun Rein, the managing director of China Market Research in Shanghai told the BBC that “it’s clear they have political backing”.
“To grow that fast internationally and get the approvals requires strong connections.”…
(Since its foundation in 2004, Anbang has) in a short span of time, it has transformed itself through a series of foreign acquisitions, including Belgian insurer Fidea Assurances and Delta Lloyd Bank.
Anbang has also expanded its presence domestically by buying stakes in China’s biggest private lender Minsheng Bank, property developers, a wind turbine maker and even a traditional Chinese medicine company.
However, there have been questions about how Anbang plans to finance its overseas purchases, given margins in China’s insurance business aren’t very large.
Mr Rein suggests some of the concerns are overblown and that the firm has managed to attract billions of dollars in private financing.
“You’re seeing Chinese companies looking to become global players. They’re well-capitalised and incredibly aggressive,” he told the BBC.
He compared them to Japanese firms in the 1980s, where many of its biggest names would buy overseas rivals and replace the management with their own.
“The Chinese are very different. They’re looking to buy brands, technology and management know-how,” he said.
Ultimately, it’s clear that for Anbang, their biggest bet is on the safety and prestige of prime US property.
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