Anbang withdraws application for NY review of insurance merger
June 1, 2016 by Kevin McCoy
The Chinese insurance firm that in April scrapped a $13.9 billion plan to buy Starwood Hotels & Resorts has now withdrawn an application for regulatory approval of its $1.57 billion merger deal with U.S. insurer Fidelity & Guaranty Life, amid requests for more financial information.
The decision by Anbang Insurance Group signaled new questions about the company as the Beijing-based company seeks to expand and become one of the largest providers of fixed annuity and life insurance products in the U.S.
Anbang withdrew its regulatory change-of-control application from the New York State Department of Financial Services on May 27, Fidelity said in a Tuesday filing with the Securities and Exchange Commission.
Anbang notified Fidelity that it plans to re-file the application, and both companies “are committed to securing the remaining regulatory approvals and seek to close the merger as expeditiously as possible,” the Iowa-based insurer said in its filing.
The New York regulator in a separate statement said Anbang withdrew its application after the company “failed to provide” information requested for review and processing of the Fidelity merger. “Anbang will be able to resubmit its application should it provide the necessary information, the statement said.
New York regulators sought more detailed information about Anbang’s funding sources for the deal, as well as the company’s shareholder structure, a person familiar with the matter said Tuesday. The person spoke on condition of anonymity because details of the review have not been made public.
In March, Fidelity said it had received notification that the federal Committee on Foreign Investment in the United States “determined that there are no unresolved national security concerns” about the Anbang-Fidelity merger. Anbang is continuing to seek approval from the Iowa Insurance Division, the lead regulator for the deal, Fidelity’s filing said.
A spokesman for the Iowa agency did not immediately respond to a message seeking comment.
Questions also arose about Anbang’s finances after a consortium led by the Chinese insurer in March trumped U.S. hotel giant Marriott International’s $12.2 billion cash and stock deal for Starwood with a $13 billion all-cash offer. Anbang ultimately raised its bid to $13.9 billion, apparently winning the ensuing duel with Marriott before reversing course and cancelling the deal.
Marriott sought to raise concerns about Anbang’s financing before the cancellation.
“Starwood stockolders should give serious consideration to the question of whether the Anbang-led consortium will be able to close the proposed transaction, with a particular focus on the certainty of the consortium’s financing and the timing of any required regulatory approvals,” Marriott said in a March 28 statement.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc
