MADRID HNA Group has acquired a 20% stake in NH Hoteles, investing about €431.6 million in a move that gives the Beijing-based company a significant foothold in Europe while also opening up expansion opportunities in burgeoning China.
The two companies will pursue the formation of a joint venture for managing hotels in China, allowing NH to enter the fastest-growing market in the world in partnership with a major established local player in the country’s tourism industry. The expansion into China would focus on the 4-star hotel market and aligns with NH’s asset-light growth strategy and may involve rebranding some existing HNA hotels under the NH flag.
The partnership will also likely include cross-marketing synergies between NH and other business areas of HNA Group, such as its airlines and tour operators. NH could become the hotel company of choice of passengers on airlines owned by HNA, the companies say.
“The alliance we are now arranging means that our company will have the opportunity to enter a market which has huge potential—China—and where there is a clear opportunity available for NH, working with a major, dynamic, powerful, prestigious business group, which will furthermore become a major shareholder of NH,” says NH Chairman Mariano Pérez Claver. “As a result, NH Hoteles’ interests in China will be fully aligned with those of HNA.”
The share acquisition, which would make HNA the second largest shareholder in NH, is subject to approval by China regulatory authorities. Two directors of HNA will become members of the NH board of directors.
“HNA Group is honored to join with the NH Hoteles’ shareholders and board members to support NH Hoteles’ management team as they continue to grow their world-class company into a truly worldwide company by developing operations in what will be the largest hotel market in the world,” says Adam Tan, executive director of HNA.