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Mergers & Acquisitions

China’s HNA pays US$446 million for stake in Old Mutual’s US unit

Hainan-based conglomerate is adding to its US$30 billion spending spree as it seeks to expand beyond tourism and aviation

PUBLISHED : Sunday, 26 March, 2017, 11:12pm
UPDATED : Sunday, 26 March, 2017, 11:12pm

Chinese conglomerate HNA Group agreed to buy a 25 per cent stake in Old Mutual’s US asset management unit for about US$446 million, adding to a US$30 billion spending spree since last year.

Old Mutual is selling down its holdings in OM Asset Management to HNA in two tranches, according to a statement from the London-based company on Sunday.

The first, comprising 9.95 per cent at US$15.30 per share, would be completed within 30 days, with a second 15 per cent stake at US$15.75 taking place in the second half, the company said.

The Hainan-based conglomerate has been investing in financial services as it seeks to broaden its portfolio beyond tourism and aviation. In the first quarter, it bought a US$200 million stake in SkyBridge Capital, agreed to acquire assets from Australia & New Zealand Banking Group and became one of the largest shareholders in Deutsche Bank.

Old Mutual is also undertaking a transformation, preparing to break up its wealth, US asset management business, emerging-markets unit and Johannesburg-based lender Nedbank into standalone entities by the end of 2018.

The split is the culmination of a strategic review started by chief executive Bruce Hemphill in November as he seeks to boost profitability and a share price that has trailed peers.

After the transactions with HNA, Old Mutual’s holding of OM Asset Management would drop to about 26 per cent from about 51 per cent now, it said.

Two directors from HNA Capital US will join Old Mutual Asset Management’s board as part of the deal, which was first reported by the Financial Times on Saturday.

OM Asset Management has about US$240 billion of assets under management.

HNA Group did not respond to calls or emails seeking comment outside Asian office hours.

The company controlled by billionaire Chen Feng last year also bought stakes in hotel operator Hilton Worldwide Holdings and electronics distributor Ingram Micro.

China’s HNA Group buys Hilton stake from Blackstone

It was leading a deal to acquire Manhattan’s 245 Park Avenue for US$2.21 billion, one of the highest prices paid for a New York skyscraper, two sources with knowledge of the negotiations said last week.

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