Mirae moves to cancel $5.8 billion deal for U.S. hotels

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Mirae moves to cancel $5.8 billion deal for U.S. hotels

Published: 04 May. 2020, 18:56

Images of the 15 luxury hotels in the United States that were slated to be sold to Mirae Asset Global Investments. [Mirae Asset Global Investments]

Mirae Asset Global Investments on Monday moved to cancel a $5.8 billion deal with China’s Anbang Insurance to acquire 15 upscale hotels located in the United States, the asset manager announced on Monday.

The Korean investment company said it sent a notice on Sunday, accusing the insurer of breaching notification obligations on the properties it sells.

“Among other things, Anbang had failed to timely disclose and discharge various material encumbrances and liabilities impairing the hotels and failed to continue the operation of the hotels in accordance with contractual requirements,” Mirae Asset Global Investments said in a statement.

Last September, Mirae Asset Global Investments signed an agreement with Anbang Insurance Group to purchase 15 five-star luxury hotels located in the United States for $5.8 billion.

The termination notice will likely intensify a legal battle with the insurance giant, as Anbang has also filed litigation against Mirae last week in the Delaware Court of Chancery for failure to close the deal, which was due to be completed March 17.

The Chinese company blamed Mirae for delaying the deal because the U.S. premium hotels are suffering financial damage amid the coronavirus pandemic.

The investment firm denied the claims raised by Anbang, arguing that the insurer’s failure of notification should be blamed for the aborted deal.

Mirae last month requested that Anbang provide the information necessary to proceed with the deal.

If the issue is not resolved within the next 15 days, Mirae said, it is entitled to terminate the deal.

At the time, Mirae said Anbang also attempted to conceal an ongoing legal battle between Anbang Insurance and a third party in the United States that could have an impact on the acquisition.

The hotels up for sale included JW Marriott Essex House New York, Four Seasons Arizona, The Ritz-Carlton Half Moon Bay, Montage Laguna Beach, Four Seasons Silicon Valley, Hotel Fairmont Scottsdale Princess, Four Seasons Resort, Residences Jackson Hole, InterContinental Chicago, InterContinental Miami and The Westin St. Francis San Francisco.

BY PARK EUN-JEE [[email protected]]