Mirae Asset Global Investments, the asset management arm of Korean financial group Mirae Asset, said Monday that it scrapped a $5.8 billion deal to acquire 15 luxury hotel properties in the United States from Chinese investor Dajia Insurance, weeks after it called off the takeover.
Mirae Asset, which acts on behalf of funds it manages, also said it invoked its right for the return of the 10 percent deposit from a third-party escrow agent as the transaction had failed.
Amid ongoing litigation, the Korean buyer blamed Dajia Insurance -- which assumed the control of assets owned by Anbang Insurance -- for failing to meet obligations and forcing the deal to end prematurely.
According to Mirae Asset, the Chinese seller failed to disclose information about a lawsuit in regard to one of the target hotel’s ownership and refused to provide a title insurance protection for the asset.
“Although Anbang was in breach of certain material obligations, Anbang had sought to close the transaction on April 17,” Mirae Asset wrote in a termination notice.
“Anbang had failed to timely disclose and discharge various material encumbrances and liabilities impairing the Hotels in accordance with contractual requirements. Anbang did not remedy these breaches, which thereby resulted in the termination of the contract in accordance with its terms by Mirae Asset.”
This came in contrast to Dajia’s claim that it had satisfied all terms of the sale, while Mirae Asset “began efforts to wriggle out” of the deal.
Mirae Asset expressed confidence over the ongoing legal battle which Dajia initiated last week.
“Mirae Asset categorically denies Anbang’s claims and is confident that it will be vindicated and that it will show through the judicial process that it is the aggrieved party injured by Anbang’s breaches and conduct,” Mirae Asset wrote.
The hospitality deal was signed in September 2019 in Mirae Asset’s push to expand its overseas alternative portfolio, but the cross-border deal was bungled amid the global coronavirus pandemic.
By Son Ji-hyoung (email@example.com