Blackstone sells $6.5bn stake in Hilton to HNA Group

The Chinese company bought a 25% interest in the global hotel chain in a continuing push to buy overseas real estate.

Blackstone is continuing to profit from its recession-era bet on Hilton Worldwide with the sale of a 25 percent stake in the hotel chain to China’s HNA Group, the firms said Monday.

Blackstone bought Hilton in 2007 in a deal valued at $26 billion and took the company public in 2013 for $20 per share, raising $2.4 billion in a record initial public offering for a hospitality company. In its most recent stock sale, the world’s largest alternative investment manager sold a 25 percent interest to Haikou-based HNA Group in a cash deal valued at about $6.5 billion, or $26.25 per share.

“We believe this mutually beneficial relationship will open new opportunities for our brands and guests around the world, particularly in light of HNA's strong position in the fast-growing Chinese travel and tourism market, the largest outbound travel and tourism market in the world,” said Christopher Nassetta, Hilton’s chief executive, in Monday’s statement.

This transaction, which is expected to be completed in the first quarter of 2017, reduces Blackstone’s remaining Hilton interest to about 21 percent. Blackstone’s global head of real estate, Jon Gray, will continue as Hilton’s chairman, and the firm will retain its other seat on Hilton’s board.

“Since our initial investment in Hilton nine years ago, the company and its leadership team have delivered phenomenal results,” Gray said in Monday’s statement. “We think the company's future is bright, and this long-term investment from HNA Group only adds to its potential.”

The purchase comes as HNA Group, which manages over $90 billion, has set its sights on the global hotel space. In April, the company agreed to buy Minneapolis-based Carlson Hotels, which owns 1,400 hotel properties, including the Radisson and Country Inn & Suites chains, for an undisclosed price, according to Bloomberg. HNA also bought a 15 percent stake in Red Lion Hotels from Seattle-based investment firm Columbia Pacific Advisors for about $22 million in June 2015.

HNA Group was founded as an aviation company in 1993 and has since diversified into hospitality, technology and other industries. The company’s first real estate investment was the acquisition of three Belgian hotels for $51 million in September 2007, according to data provider Real Capital Analytics.

“This [Hilton] investment is consistent with our strategy to enhance our global tourism business, and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms to provide travelers more choice, value and world-class services,” said Adam Tan, HNA Group’s chief executive, in Monday’s statement.