Anbang Explained

Anbang Insurance Group
Native Name:	安邦保险集团
Area Served:	China
Key People:	Wu Xiaohui, Chairman & GM
Defunct:	2020
Location City:	Beijing
Location Country:	China

Anbang Insurance Group was a Chinese holding company whose subsidiaries mainly deal with insurance, banking, and financial services based in Beijing. As of February 2017, the company had assets worth more than (US$301 billion).^[1] The Financial Times described Anbang as "one of China’s most politically connected companies."^[2]

Anbang was founded by Wu Xiaohui in 2004 as a regional car insurance company. Chen Xiaolu, a prominent princeling and son of Marshal Chen Yi, served as an early director, although Chen stated that he was merely an advisor and not a shareholder.^[3] Its founding shareholders included state-owned car maker Shanghai Automotive Industries Corp., which held a 20% stake. In 2005, state-owned oil company Sinopec bought a 20% share in Anbang.^[4]

Anbang has more than 30,000 employees in China and is engaged in offering various kinds of insurance and financial products.^{[5] [6]}

Anbang's chairman, Wu Xiaohui, was detained in Beijing by government authorities on June 8, 2017, as an investigation of Anbang's activities.^[7] In February 2018, China's insurance regulator took control of Anbang, and Wu was prosecuted. On May 10, 2018, Wu Xiaohui was sentenced to 18 years of imprisonment after he was found guilty of fraud and embezzlement.^[8]

Overseas acquisitions

The company holds a geographically diversified portfolio of assets in financial services, real estate and lodging.

• In 2014, Anbang Insurance acquired Fidea Verzekeringen, an insurer based in Belgium.
• In 2014, Anbang Insurance purchased the Waldorf Astoria New York hotel from Hilton Hotels for nearly US$2 billion.
• In 2015 Anbang purchased Dutch insurer from the Netherlands. Anbang paid the Netherlands €150m outright, and agreed to infuse between €770m and €1bn in fresh capital, and to take on €550m of debt.^[9]
• In 2015 Anbang paid US$1 billion for a 57.5% stake in South Korea's Tongyang Life, an insurance company, in what was reported to be the first direct investment in a South Korean financial institution by a mainland China entity.^[10]
• In November 2015, Anbang announced that it would buy Iowa-based insurer Fidelity & Guaranty Life for about $1.57 billion.^[11] However, this deal never came to fruition.
• In February 2016, the Financial Post in Canada reported that Anbang planned to purchase a 66% stake in four office towers of Bentall Centre in Vancouver from Ivanhoe Cambridge, a subsidiary of Caisse de dépôt et placement du Québec;^[12] and subsequently remaining 33% stake in May 2016.^[13] Terms of the deal were undisclosed. However, the price paid by Anbang is reported to value the property at over CAD$1 Billion.
• In March 2016, Blackstone agreed to a further US$6.5 billion sale of 16 landmark US hotels owned by the Strategic Hotels & Resorts REIT, including the historic Hotel del Coronado near San Diego, the Westin St. Francis in San Francisco, several Four Seasons resorts, and Manhattan's JW Marriott Essex House hotel.^{[5] [14]}
• In April 2016, Anbang purchased Allianz’s South Korea operations.^{[15] [16]}

• In 2016, Anbang purchased Retirement Concepts, a Canadian company with 24 retirement homes in British Columbia, Calgary and Montreal.^[17] The company was later criticised after three of the retirement homes on Vancouver Island were put under the management of the health authority due to reported inadequate care of facility residents in December 2019.^[18]

Anbang has also made large-scale bids that did not culminate in a transaction. On March 14, 2016, a consortium led by Anbang made a US$14 billion offer for Starwood.^[19] Other members of the consortium included J.C. Flowers & Co and Primavera Capital Group.^{[20] [21]} The latter is headed by Fred Hu, the former Chairman of Greater China at Goldman Sachs.^{[22] [23]} The bid was ultimately unsuccessful.^[24] In 2017, the company also ended talks to invest billions of dollars in a Manhattan office tower (666 Fifth Avenue) owned by the family of Jared Kushner, President Trump’s son-in-law and a senior White House aide.^[25]

Liquidation

On 14 September 2020, Reuters reported that Anbang would disband and liquidate the company.^[26]

Notes and References

1. News: About Anbang Insurance Group Co., Ltd.. 2018-05-11. 2018-05-11. https://web.archive.org/web/20180511150035/http://ab.anbanggroup.com/jtjs/index.htm. dead.
2. News: China's Anbang agrees $6.5bn hotel deal with Blackstone. Massoudi. Arash. 2016-03-13. Financial Times. 2016-03-16. Fontanella-Khan. James. 0307-1766.
3. News: Chinese princeling and Anbang 'adviser' Chen Xiaolu dies at 71. Gan. Nectar. 2018-03-01. South China Morning Post. 2018-03-07.
4. Web site: Chinese insurer has global ambitions. SFGate. 2016-03-17.
5. News: WSJ: What is Anbang Insurance?. Wall Street Journal. 28 March 2016. October 13, 2016. Stahl. George.
6. News: Financial Times: New wealth management products power Anbang and rivals. Weinland. Don. July 17, 2016. July 18, 2016.
7. News: Tsang. Aime. Morning Agenda: Anbang Chairman Detained. The New York Times. 14 June 2017.
8. News: China Sentences Anbang's Wu Xiaohui to 18 Years in Prison. Fortune. 2018-05-24. en.
9. News: New York Waldorf hotel's owner Anbang buys Dutch insurer Vivat - FT.com. Financial Times. 16 February 2015. 2016-03-17. Gray. Alistair.
10. News: China's Anbang steps up buying spree with $1bn Tongyang deal. Mundy. Simon. 2015-02-17. Financial Times. 0307-1766. 2016-03-17.
11. News: China's Anbang wins CFIUS approval to buy Fidelity & Guaranty Life. 2016-03-15. Reuters. 2016-03-17.
12. News: Chinese investors snag Vancouver's biggest real estate prize: All four towers of the Bentall Centre. 2016-02-17. Financial Post. 2017-08-02. en-US.
13. News: Here's How Anbang Can Unwind Its $10 Billion Deal Spree. 2017-08-01. Bloomberg.com. 2017-08-02.
14. News: Yu. Hui-Yong. Blackstone Said to Sell Hotels to Anbang for $6.5 Billion. Bloomberg Business. 13 March 2016.
15. News: China's Anbang to Buy Allianz's Korean Operations After Dropping Starwood Bid. Wu. Kane. Wall Street Journal. 0099-9660. 2016-04-08.
16. News: Anbang to acquire Allianz's South Korea operations. Ralph. Oliver. 2016-04-06. Financial Times. 0307-1766. 2016-04-08.
17. News: Chinese company Anbang buys stake in B.C.-based retirement home chain. The Globe and Mail. 28 November 2016. Chase. Steven.
18. News: B.C. health authorities intervene in three China-owned senior care facilities after reports of neglect. Justine. Hunter. 2019-12-03. 2019-12-04. The Globe and Mail.
19. Web site: Starwood receives nearly $14 billion buyout bid from Chinese group. 14 March 2016.
20. Web site: Anbang Insurance: The Chinese Company You Never Heard Of That's Trying To Take Over U.S. Hotels. Forbes. 2016-03-16.
21. Web site: New Starwood Takeover Bid: The Players Behind the $14 Billion Offer. Ting. Deanna. March 14, 2016. Skift. 2016-03-16.
22. Web site: Primavera Capital Group. www.primavera-capital.com. 2016-03-16. 2016-03-20. https://web.archive.org/web/20160320233658/http://www.primavera-capital.com/en/page/partners/. dead.
23. News: Starwood Gets Offer From Group Led by Anbang, Threatening Marriott Deal. Carew. Rick. Steinberg. Julie. Wall Street Journal. 0099-9660. Jamerson. Joshua. 2016-03-16.
24. News: Inside the deal: How Anbang's chairman Wu nearly landed Starwood. Sender. Henny. 2016-04-05. Massoudi. Arash. Financial Times. 0307-1766. Weinland. Don. 2016-04-08.
25. News: No Deal Between Kushners and Chinese Company Over Fifth Avenue Skyscraper. Forsythe. Michael. 2017-03-29. The New York Times. 2017-06-16. Bagli. Charles V.. en-US. 0362-4331.
26. News: Leng. Cheng. Woo. Ryan. September 14, 2020. China's Anbang Insurance Group to apply to disband, liquidate. Reuters. September 21, 2020.