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China's Anbang challenges Marriott with $13 billion Starwood offer

China's Anbang Insurance Group Co has challenged Marriott International Inc's (MAR.O) merger with U.S. hotel operator Starwood with a $12.8 billion cash offer, burnishing its credentials as one of China's top corporate acquirers.


The non-binding bid, unveiled on Monday, just days after Anbang agreed to acquire Strategic Hotels & Resorts Inc from buyout firm Blackstone Group LP (BX.N) for $6.5 billion, would represent by far the biggest Chinese investment in U.S. real estate assets. Chinese insurers are rushing to acquire high-yielding assets as they struggle to keep up with the policy liabilities of the country's aging population. U.S. assets are also seen as a good hedge against any future weakness in the yuan. The head of China's insurance regulator, Xiang Junbo, wrote in January in a magazine published by the country's central bank that Chinese insurers should venture overseas for investments.

These investments, however, are not without hurdles. Anbang's $2 billion acquisition of the iconic Waldorf Astoria Hotel in New York, which was completed last year, attracted scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals over possible national security concerns. U.S. President Barack Obama used to stay at that hotel when visiting United Nations headquarters in New York.