BX Blackstone Inc

Chinese conglomerate HNA Group said Monday it plans to buy a roughly 25% stake in Hilton Worldwide Holdings Inc. from Blackstone Group L.P. for $6.5 billion, the latest move into American real-estate assets by a Chinese firm.

Under the terms of the deal, which will reduce Blackstone's interest in Hilton to approximately 21%, HNA will pay $26.25 a share in cash for the stake, a 15% premium to Hilton's closing price of $22.91 on Friday.

Hilton shares rose 4.8% to $24 in premarket trading.

The move comes as Hilton is expected to later this year split into three distinct entities, the result of a plan to spin off a chunk of its hotels into a real-estate investment trust and to separate its timeshare business. The HNA-Blackstone transaction is expected to close in the first quarter of 2017, and HNA will own approximately 25% of all three companies.

The agreement allows HNA to appoint two directors, one HNA member and one independent member, to Hilton's Board of Directors, bringing the total to 10 members.

Chinese firms—especially insurers—have shown greater appetite for U.S. real-estate assets lately. Private investment firm Starwood Capital Group said last week it sold a stake in a roughly $2 billion portfolio of U.S. hotels to a group led by China's largest insurance company, China Life Insurance Co. Ltd. Last year, Starwood reached a deal to sell the Baccarat Hotel in Manhattan to China's Sunshine Insurance Group. And Anbang Insurance Group Co. paid nearly $2 billion for the Waldorf Astoria hotel in Manhattan before it engaged in a high-profile bidding war with Marriott International Inc. for Starwood Hotels & Resorts Worldwide Inc., though Anbang ultimately walked away.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

October 24, 2016 09:45 ET (13:45 GMT)

Blackstone (NYSE:BX)
Historical Stock Chart
From Mar 2024 to Apr 2024

Blackstone (NYSE:BX)
Historical Stock Chart
From Apr 2023 to Apr 2024