South Korea based asset management firm Mirae Asset Global Investment has been sued for failing to purchase 15 U.S. hotels from China’s Anbang Insurance Group under the stipulated time frame in the deal.
This was announced by Mirae’s spokesperson after time elapsed for the purchase, Mirae was set to acquire these hotels at a cost of $5.8 billion. The asset management company failed to honour its end of the deal before deadline prompting the Insurance Company to seek legal address on the matter.
Mirae spokesperson confirmed the deal was supposed to be closed on April 17, however, this didn’t happen as they accuse the seller of delaying on implementing some agreed conditions. The spokesman declined to disclose these conditions which are yet to be met.
Last year, various entities among them Mirae Asset Daewoo (006800) led by Mirae Investment agreed to purchase the hotels situated across different cities in the U.S including San Francisco, Los Angeles and New York.
It’s not clear whether in the lawsuit sues other members of the consortium, additionally, it wasn’t established if the lawsuit seeks damages.
Anbang Insurance initiated a process of selling all its overseas assets after the Chinese government took control of the embattled insurer in 2018.
According to a WSJ post, Chinese Dajia Insurance Group, has taken over the process of selling these hotels and requested Delaware Court of Chancery to propel Mirae into finalizing the purchase.
Dajia Insurance was formed last month with an aim of taking over assets from Anbang Insurance.
Chinese government confirmed Dajia will operate and remain a private owned entity. Dajia declined to comment on the matter when reached upon.
Mirae didn’t give extra reasons for failing to finalize the deal, nonetheless, experts says recent increasing numbers or merger and acquisition deals by the company maybe a reason. Others site global breakout of coronavirus pandemic as a possible reason also.