Mirae Asset wins lawsuit against China’s Anbang over $5.8 bn US hotel deal

Mirae Asset Global Investments Co. will be able to recover a $580 million deposit it paid to Anbang Insurance Group for a $5.8 billion deal to buy 15 luxury hotels in the US, after winning a lawsuit against the Chinese insurer.

In a regulatory filing on Dec. 1, the Korean company also said that the Delaware Chancery Court ruled on Monday that Anbang must pay Mirae Asset $3.68 million related to deal transactions and legal costs incurred during the lawsuit.

A Mirae Asset official said he doesn’t expect the Chinese insurer to appeal the case to a higher court as chances are low for the Delaware court ruling to be reversed. Anbang representatives were not immediately available for comment.

According to Mirae, the Delaware Chancery Court ruled that Anbang failed to abide by specific terms of the contract it signed with the Korean company over the sale of the hotels.

In September of 2019, Mirae Asset agreed to buy 15 luxury US hotels from Anbang for $5.8 billion, in a deal that would have been the largest-ever cross-border property deal by a Korean company, and paid Anbang $580 million as a deposit.

But the deal went awry when Mirae Asset notified Anbang in May of this year of its decision to cancel the deal.

The Korean asset manager said at the time that Anbang’s litigation with a third party over the ownership of six out of the 15 hotels constituted a breach of their contract terms and called for a return of the $580 million deposit.

Both companies had earlier sued each other over the case in US courts.

HOTELS, TRAVEL INDUSTRY REELING FROM COVID-19

The court ruling comes as the hotel and travel industries are reeling from the impact of the COVID-19 pandemic, which has imposed a global lockdown.

The hotels Mirae Asset were supposed to acquire included The JW Marriott Essex House in New York, the Ritz-Carlton Half Moon Bay, the Westin St. Francis in San Francisco and the Loews Santa Monica Beach Hotel.

Mirae has been snapping up global hotel chains since 2013, with Chairman Park Hyeon-joo saying: “Highly reputed luxury hotels in the best locations can survive a recession and their value doesn't change over time.”

Write to Jae-Won Park at wonderful@hankyung.com
In-Soo Nam edited this article.