Any Starwood loyalist surely remembers late 2015 and early 2016, when we had no clue what the future of Starwood would look like. At the time there was a bidding war between Chinese conglomerate Anbang and Marriott, both of which wanted to acquire Starwood. There was a bidding war, and it looked like Marriott taking over Starwood was a sure thing, then it looked like Anbang taking over Starwood was a sure thing, and then eventually Anbang withdrew their offer.
Many Starwood loyalists (myself included) were hoping Anbang would win out in this bidding war, since it would leave the best chance of Starwood remaining an independent company. In many ways, we preferred the “evil” we didn’t know over the “evil” we did know. I put “evil” in quotes because I don’t think Marriott is actually evil, but rather because I felt like Starwood would lose its identity under their ownership.
While the details of the Marriott takeover of Starwood are widely known, there’s an interesting update about the alternative as well. Anbang has been doing horribly financially (like many Chinese conglomerates). The government had already sized control of them in February, with the former chairman being on trial for fraud and embezzlement.
There’s an even further update there, as this week the Chinese government gave Anbang a roughly 10 billion USD lifeline, in hopes of keeping them alive and eventually helping them find new investors.
Anbang has spent about 20 billion USD on international business deals since 2014, many of which were risky deals that they drew scrutiny for.
So I guess if the Anbang deal had gone through, at this point Starwood would basically be owned by the Chinese government, or Anbang would have had to sell Starwood in some sort of a fire sale, given what the scale of the deal would have been (not unlike what we’re seeing with HNA Group and Hilton). Is it sad that I still think it might have been the better of two options, as it would have kept Starwood independent (well, as independent as a company owned by the Chinese government can be)?
(Tip of the hat to Jake)