China's Anbang drops bid for Starwood, ending bidding war

China's Anbang Insurance Group Co said on Thursday it has abandoned its $15 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. They asked not to be identified disclosing confidential discussions.

"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. It was not immediately clear if Marriott had been planning a counterbid to Anbang's March 26 offer.

Anbang has previously bowed out of smaller deals, but this is the most high-profile deal it has abandoned, people familiar with the matter said.

Starwood said on Monday that Anbang had raised its offer to almost $15 billion. Anbang had been expected to firm up that non-binding offer, so that Starwood would formally declare it superior to Marriott's.