Mirae Asset Global Investments said Wednesday it has acquired 15 premium hotels in the United States in a package deal reportedly worth more than 5.8 billion U.S. dollars, the largest alternative investment deal ever for a South Korean financial firm.
The company said that it signed a contract to acquire 15 high-end hotels in the United States from Chinese insurer Anbang Insurance Group. Mirae Asset did not officially disclose the size of the deal, which is said to be worth over 5.8 billion dollars.
Anbang purchased the 15 hotels from Blackstone, the world's largest private equity fund, in 2016. The Chinese insurer had to put them up for sale amid its worsening management crisis after Chinese authorities arrested its top manager on charges of illegal fundraising and fraud and seized control of the group. Mirae Asset was named the preferred bidder for the U.S. hotels, beating other global investors such as Blackstone and Brookfield in a bidding war that started early this year.
The hotels are located in nine major cities in the U.S., including New York, Los Angeles and Chicago. Among the properties are JW Marriott Essex House New York, which overlooks the Central Park in Manhattan, The Ritz-Carlton Half Moon Bay near San Francisco and InterContinental hotels in Chicago and Miami. The 15 hotels have a combined 6,912 guestrooms and over 66,000 square meters of total banquet hall space.
Mirae Asset plans to raise the acquisition funds through the parent Mirae Asset Group’s own capital investment and loans. Mirae Asset Group subsidiaries, including Mirae Asset Daewoo, reportedly plan to inject 2.4 trillion won (approximately 2 billion dollars). Excluding funds raised through the group’s own investment and loans, another 1 trillion won (838.4 million dollars) will likely be secured from other financial institutions in the form of equity investment.
The latest acquisition is in line with Mirae Asset Financial Group’s drive for seeking alternative investment since the early 2000s. Mirae Asset Global Investments, which introduced South Korea’s first real-estate investment fund in 2004, has been acquiring famous hotels and properties around the world since 2006, including Mirae Asset Tower in Shanghai, Four Seasons Hotel Sidney in Australia, and Hyatt Regency Waikiki Beach Resort and Spa in Hawaii.
Group founder Park Hyeong-joo, chairman of Mirae Asset Daewoo Hong Kong and the group’s global investment strategy advisor, recently stressed the need to invest in sound assets that generate continued profits and diversify the group’s global portfolio.
Through the latest deal, Mirae Asset has struck a balance between resorts and urban hotels and diversified its hotel investments into various brands. The group also expects to earn resale profits due to the properties’ rarity value. Also promising is that the U.S. tourism industry has been growing for the last decade and that the hotel industry has been growing at an annual average of 6 percent.
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