After a busy two years that saw the successful acquisition of New York City's Waldorf Astoria hotel and Strategic Hotels & Resorts, as well as the failed $14-billion bid for Starwood, Anbang Insurance Group is planning to take a break from buying.
For now, Bloomberg is reporting, the Chinese company is going to focus on "digesting" the $13.5 billion of overseas businesses it has acquired since 2014.
While Vice Chairman Yao Dafeng said that Anbang will "still continue to seek acquisitions" (mostly other insurance companies and banks) thanks to the company's “very strong reserve strength,” his comments suggested that the giant's spending spree is done...for now. “We want to build up the existing synergies a bit first, and consider new deals when appropriate opportunities emerge,” Yao said.
The vice chairman said that Anbang is working to complete all pending acquisitions, and will continue looking for new ones in the meanwhile.
In a similar move, Fosun Group, which purchased the Club Med brand last year, has also slowed its pace in the past year as founder Guo Guangchang looks to cut debt. Still, slow does not mean stop: Just this past spring, Fosun announced plans to invest approximately $1.68 billion in the Sanya Atlantis project in Sanya, in South China's Hainan province.
The Anbang slowdown is just one more change for the company, which is gearing up for an IPO of its life insurance business. That move is reportedly part of a plan to better integrate itself into the global community as an “open and transparent” player, Yao claimed.
That transparency is crucial because the company has faced calls for more disclosure by Standard & Poor’s Ratings Services and drawn scrutiny for its "unconventional" deal-making methods. According to Bloomberg, Hong Kong's top IPO arranger, Morgan Stanley, will not be taking part in the offering, and the hesitance stems from uncertainties on whether the company would provide enough details on its ultimate ownership structure.
And that ownership structure has made headlines. "A group of 39 companies control Anbang," the New York Times reported last week, noting that the company now has about $295 billion in assets. "Many of those companies are in turn owned by a welter of shell companies, many with similar names and addresses or common owners."
Ultimately, the Times claimed, those 39 companies are controlled by about 100 people, many of whom come from the home county of Anbang's chairman, Wu Xiaohui.
Yao called the report “not factual,” and insisted that Anbang is a private company "that strictly abides by Chinese laws and regulations.”