CHINA Anbang Insurance Group Co. said Thursday it has abandoned its US$14 billion bid for Starwood Hotels & Resorts Worldwide Inc., paving the way for Marriott International Inc. to buy the Sheraton and Westin hotels operator.

    The surprise withdrawal marks an anticlimactic end to a bidding war that had pitted Marriott’s ambitions to create the world’s largest lodging company, with about 5,700 hotels, against Anbang’s drive to create a vast portfolio of U.S. real estate assets.

    It also represents a blow to corporate China’s growing ambitions to acquire U.S. assets. Anbang’s acquisition of Starwood would have been the largest takeover of a U.S. company by a Chinese buyer.

    “We were attracted to the opportunity presented by Starwood because of its high-quality, leading global hotel brands, which met many of our acquisition criteria, including the ability to generate consistent, long-term returns over time,” Anbang said in a statement.

    “However, due to various market considerations, the consortium has determined not to proceed further,” Anbang added, referring to the joint bid it had put together with private equity firms J.C. Flowers & Co. and Primavera Capital Ltd.

    Anbang did not offer Starwood a reason for not following through on its raised offer of March 26, according to people familiar with the matter.

    “The reason of withdrawal is simple — Anbang isn’t interested in a protracted bidding war,” Fred Hu, chairman of Primavera, told Reuters in an email statement.

    It was not immediately clear if Marriott had made a counterbid to Anbang’s March 26 offer.

    Starwood said Monday that Anbang had raised its offer to almost US$14 billion. Anbang had been expected to firm up that non-binding offer, so that Starwood would formally declare it superior to Marriott’s.

    Anbang had already made a US$13.2 billion binding and fully financed offer earlier last month, which Starwood accepted as superior. Had Marriott not counterbid March 21, Starwood would have proceeded with the earlier Anbang offer.

    Starwood also said in a statement late Thursday that Anbang had withdrawn its offer “as a result of market considerations,” which it did not specify. Marriott declined to provide immediate comment.

    The move fueled speculation on what drove Anbang to change course, especially given that many Chinese overseas acquisitions have been encouraged by the country’s authorities.

    Chinese financial magazine Caixin reported earlier last month that China’s insurance regulator would likely reject a bid by Anbang to buy Starwood, since it would put the insurer’s offshore assets above a 15 percent threshold for overseas investments.

    Should Anbang have clinched an agreement with Starwood, it would have been scrutinized by the Committee on Foreign Investment in the United States (CFIUS), an interagency panel that reviews deals to ensure they do not harm national security.

    However, sources had said that both Starwood and Anbang believed the deal would have received CFIUS clearance.

    (SD-Agencies)