In the news: Marriott counterbids Anbang for Starwood, China reforms its electricity pricing system and the U.S. cuts ZTE some slack

Anbang faces challenge from Marriott in Starwood fight

As Marriott International tries to lock down its acquisition of Starwood Hotels & Resorts Worldwide with a sweetened cash-and-stock bid of $13.6 billion, the onus is on Beijing-based Anbang Insurance Group to increase its $13.2 billion cash offer. The breakup fee has also been increased by $50 million to $450 million. Analysts expect Anbang, which has been aggressive in its recent bids, to come back with a higher offer, though as of Monday the company had not commented on whether it would. A successful purchase by Anbang would mark the largest-ever acquisition of a U.S. company by a Chinese buyer. Skadden, Arps, Slate, Meagher & Flom is representing Anbang and its consortium, Gibson, Dunn & Crutcher is acting for Marriott and Cravath, Swaine & Moore is advising Starwood. It is likely that Anbang will increase its bid, as it looks to obtain trophy Western assets and shift capital outside China. This deal would be significant for either acquirer, because in today's world where data is everything, the control over so much guest information and relationships allows for enhanced targeted marketing and pricing. An Anbang takeover will be subject to CFIUS review, though it will probably get cleared.* The Marriott-Starwood merger has already received antitrust approval in the U.S. and Canada, with pending clearances from the EU and China.

*Same day update: It appears that China could be more likely to reject the deal, not the U.S. The China Insurance Regulatory Commission (CIRC) reportedly “disapproves” both Anbang's outbound acquisitions – Starwood and Strategic Hotels – as the deals would break rules banning insurers from investing more than 15% of their assets abroad. Source: Caixin