HNA Group Pauses After $34 Billion Global Acquisition Spree (1)

(Bloomberg) -- After a $34 billion dealmaking spree over the past year, HNA Group Co. may need some time to catch its breath.

The acquisitive Chinese conglomerate’s potential bid for Singapore logistics operator CWT Ltd. could be delayed until at least the end of the year, people with knowledge of the matter said. HNA is weighing changes to the deal structure and is still deciding which of its many entities will make the offer, according to the people, who asked not to be identified because the information is private.

HNA, which has been in exclusive talks with CWT’s biggest shareholder since May, is a major shareholder in at least 10 listed companies, data compiled by Bloomberg show. CWT fell as much as 1.5 percent Wednesday, the biggest intraday decline in two weeks. Shares were down 0.5 percent at 9:50 a.m. in Singapore, giving the company a market value of S$1.2 billion ($868 million).

HNA and its listed arms have announced at least $34.1 billion of acquisitions in the past year, averaging more than two purchases a month, compared with $12.7 billion during the prior 12-month period, according to data compiled by Bloomberg. The company, led by aviation tycoon Chen Feng, said Monday it will buy a $6.5 billion stake in Hilton Worldwide Holdings Inc.

The deals are part of a record $219 billion of overseas acquisitions announced by Chinese companies this year as they seek to gain foreign expertise and cater to the nation’s increasingly affluent consumers. HNA agreed earlier this month to buy CIT Group Inc.’s $10 billion plane leasing business, adding to other recent purchases that include golf courses, an in-flight catering provider and the world’s biggest ground and cargo handling company.

Financing Talks

HNA controls Hainan Airlines Co., China’s fourth-largest carrier by market value. The company, based on a tropical island in southern China dotted with beach resorts, also runs businesses that include insurance firms, ship repairs, logistics and airports, according to its website. HNA is still engaged in discussions with CWT’s biggest shareholder, and the parties still hope to announce a transaction by the end of the year, the people with knowledge of the matter said.

A Singapore-based spokesman for CWT and a Beijing-based spokeswoman for HNA declined to comment.

The Chinese company has been in talks with lenders including RHB Capital Bhd. and Malayan Banking Bhd. on financing the potential CWT purchase, people with knowledge of the matter said in May. CWT, led by chief executive officer Loi Pok Yen, said this month that negotiations are still ongoing and there’s no certainty the talks will result in a definitive agreement.

CWT said in August last year that its controlling shareholder was working with Credit Suisse Group AG and DBS Group Holdings Ltd. on a strategic review of its business and assets, which could lead to a deal involving the company.

The company, founded in 1970, employs about 6,000 people and offers services including commodity logistics, freight forwarding, warehousing and defense procurement, according to its website. It also controls MRI Group Pte, a trader of base metals and petroleum products, and helps manage Cache Logistics Trust, which owns industrial property in Singapore, Australia and China.

(Updates with CWT share move in third paragraph.)

--With assistance from Dong Lyu To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net. To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Timothy Sifert

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