Chinese Investor

Shopaholic takes a break

Chairman Of HNA Group Chen Fent At A News Conference
Too big to fail? Source: Bloomberg

It long looked as though nothing could satisfy HNA’s enormous appetite. Since early 2016, the conglomerate that started out as a regional airline in south China has disbursed an eye-watering $40 billion and snapped up anything that moves people, products or capital: especially banks, logistics and travel companies.

In May this year, the former airline purchased a nearly 10-percent stake in Deutsche Bank, which on Thursday morning reported a profit of €466 million, or $545 million, for the second quarter of this year. HNA also took over US electronics dealer Ingram Micro and Swiss airline caterer Gategroup Holdings, and acquired a 25-percent stake in the Hilton hotel chain. Mid-July, Deutsche Bank’s new biggest shareholder signed an agreement giving it 60 percent of Rio de Janeiro’s international airport, Brazil’s second-busiest.

Founder Chen Feng often talks fondly about his empire, calling it a “miracle.” But recently, HNA encountered some painful setbacks on its global shopping spree: Deals collapsed, watchdogs turned a critical eye toward the firm and rumors – denied by HNA – made the rounds about a withdrawal of support by several banks. None of this sounds too good for Deutsche Bank.

Other stalled investments include $416 million to create a joint venture with Global Eagle Entertainment (GEE), an American provider of media solutions for airplanes. That failed after the Committee on Foreign Investment in the United States refused to okay the deal. Then, HNA withdrew on its own accord from the HSH Nordbank sale in Hamburg.

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