Radisson Changing Hands Again, Jin Jiang International Announces Acquisition
Nicole Norfleet and Dee DePass | Star Tribune (Minneapolis) | August 10, 2018 1:00am
Aug. 10--Chinese hospitality and travel group Jin Jiang International Holdings Co. has agreed to buy Radisson Hospitality Inc., the Minnetonka-based company known for its Radisson hotels, from fellow Chinese conglomerate HNA Tourism Group.
Shanghai-based Jin Jiang develops and manages thousands of hotels in China and around the world. It entered into an agreement Thursday that would make it the owner of Radisson after a series of transactions.
As part of the deal, Jin Jiang would buy 51 percent of the outstanding shares in Radisson Hospitality's sister company Radisson Hospitality AB, and another 18.5 percent of shares from HNA's Swedish affiliate, according to a statement.
The deal is expected to close at the end of the year.
After the sale, Jin Jiang is obligated to acquire the rest of the shares of Radisson Hospitality AB.
Once finalized, Jin Jiang would control the hotel brands many travelers recognize including Radisson, Radisson Blu, Radisson Red, Park Inn and Country Inn & Suites.
In late 2016, HNA Tourism Group purchased Radisson Hospitality Inc., which was then known as Carlson Hotels, from the Carlson family. The deal also made HNA the majority shareholder of Carlson Hotels' European sister company Rezidor Hotel Group.
Earlier this year, HNA renamed the combined entities Radisson Hotel Group to incorporate the flagship Radisson name and began an effort to streamline the brand, which includes an overhaul of hundreds of properties.
"Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang International to join one of the largest hotel companies in the world," said John M. Kidd, chief executive and chief operating officer of Radisson Hospitality, Inc., in a statement.
It is unclear how the Radisson brand would be configured into the massive Jin Jiang going forward.
According to Hotels Magazine, in 2017 Jin Jiang's hotel empire encompassed 6,794 hotels with 680,000 rooms. In contrast, Radisson Hotel Group had 1,151 hotels with 179,379 rooms.
Jin Jiang's reach is wide. The company, which is controlled by the government and based in Shanghai, owns 1,566 Jin Jiang branded hotels in China. It also owns the luxury Jin Jiang Hotel in Shanghai, the Group du Louvre in Europe, plus parts of the Accor SA chain in France.
It's not clear how Jin Jiang's news Thursday will change the hotel landscape in the Twin Cities.
One hotel industry observer said he doesn't anticipate immediate changes as a result of the Jin Jiang purchase.
Kirby Payne, president of HVS Hotel Management in Minneapolis, said the sale of Radisson brands to Jin Jiang represents the shifting of control over HNA's assets from one arm of the Chinese government to another.
After the debt of the acquisition-focused HNA ballooned to $94 billion in 2017, it was essentially taken over by the government and forced to begin selling off assets.
In June, HNA sold the City Center complex in downtown Minneapolis for about $320 million. That HNA sale is just part of about $17 billion worth of hotel asset divestitures organized this year alone. Thursday's news added one more.
"I think this has zero impact on the Carlson family," Payne said of the Radisson sale to Jin Jiang. "And in the short run, it has no impact on the Twin Cities. You don't move a company like this in six or nine months. Even if Jin Jiang gave control [of the Radisson hotels] to one of their other hotel companies, they can't reshuffle how it works quickly."