Potential CFIUS Filing: HNA Group and Hilton Worldwide Holdings

Status: Potential Filing

Acquirer: HNA Group (China)

Acquired: Hilton Worldwide Holdings (US)

Value: Approx. US$6.5 billion

Industry: Hospitality

On October 24, Chinese aviation and shipping conglomerate HNA Group announced that its subsidiary, HNA Tourism Group Co., Ltd ., would buy an approximately 25% interest in hotel operator Hilton Worldwide Holdings Inc. from its largest shareholder, Blackstone Group LP, for US$6.5 billion. (See Joshua Jamerson and Kane Wu, The Wall Street Journal, “China’s HNA Group to Buy 25% Stake of Hilton,” Oct. 24, 2016; see also Hilton Form 8-K, Oct. 24, 2106, SEC Filing.) According to the Stock Purchase Agreement filed by Hilton Worldwide Holdings, the transaction will only be subject to the Committee on Foreign Investment in the United States (CFIUS) clearance if (i) CFIUS requests a notification; (ii) the parties agree to notify CFIUS; or (iii) CFIUS commences an investigation on its own initiative. (See Stock Purchase Agreement, Form 8-K, EX-99.1, Section 6.02(f), Oct. 24, 2016, SEC Filing.) In a press release, Hilton indicated that the investment by the HNA Group is part of “establishing a long-term strategic investment in Hilton and Hilton’s planned spin-offs of Park Hotels & Resorts (“Park”) and Hilton Grand Vacations (“HGV”).” (See Hilton Press Release, HNA Group Makes Strategic Investment in Hilton, Oct. 24, 2016.)

It is worth noting that HNA Group is the largest stockholder of Tianjin Tianhai Investment Company Ltd., which recently received approval for its acquisition of U.S. logistics company Ingram Micro, Inc. We have been tracking the Tianjin Tianhai/Ingram Micro filing. See our previous post here.

Please contact us at InternationalTradeCompliance@squirepb.com with any question regarding this post.