HNA: China’s Next Big Global Investor? 海航集团：中国下一个大型全球投资者？
China’s HNA Group is taking an unusually high-profile approach to global M&A, seeking out assets at bargain prices as it attempts to become one of China’s first major private investors on the worldwide stage. HNA, controlled by tropical Hainan province, is perhaps best known for its ownership of Hainan Airlines (Shanghai: 600221), a flagship asset long considered one of China’s best run airlines and whose investors also include billionaire George Soros. Now the company is talking about a recent global buying spree that has seen it snap up assets in a range of industries, including shipping and hotels, and boasting it has an additional war chest of more than $6 billion for more purchases. (English article) This company already caught my attention last year when its name popped up as a serious bidder for struggling US film studio Metro-Goldwyn-Mayer, better known as MGM. In August it teamed up with a private equity firm to buy GE’s (NYSE: GE) SeaCo container leasing unit for $1 billion, and its top executive said it’s sniffing around for other major deals as well. Despite its government ties, this company is quite interesting as it behaves much more like a private firm than other big Chinese global investors, whose moves are often motivated as much by politics as by commercial factors. As such, HNA looks strikingly similar to CITIC, the sprawling, quasi-private Chinese investment group that became a pioneer in the 1980s and ’90s by buying up assets outside China, many of those in Hong Kong, as the country began opening to the West. It’s still far from clear that HNA can become a serious new Chinese investor on the global stage, as the major transactions it is trying to pursue are often expensive, complex and could potentially run into political issues. But HNA certainly seems determined to become a player, and its strong connections and limited successes so far could mark the beginning of its longer-term emergence as a big new player on the global investment scene.
Bottom line: HNA Group could become China’s next big major global investor if it can extend its short but relatively successful strategy for global M&A.
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