Big Japanese Developer Sells Part of Westin Chain to Mexican Hotelier
NEW YORK (AP) _ Aoki Corp., a large Japanese developer that purchased U.S.-based Westin Hotels & Resorts more than six years ago for $1.53 billion, is selling a large chunk of the chain to a Mexican competitor for $708 million.
The acquisition announced Monday marks another retrenchment for a Japanese multinational and is at least a partial reflection of global economics. Many Japanese corporations have been hurt because of the deep recession in their home country, while many businesses in Mexico have benefited from their nation’s rapid expansion in trade and investment.
Under the deal, Westin’s brand name, business and operations in North America, South America and Europe will be owned by DSC, a large property, construction and engineering concern based in Mexico City.
Aoki will retain Westin’s properties in the Asian-pacific Region, six hotel properties in Canada and several minority investments in the United States.
″This transaction underscores the interest Mexican companies have in becoming global competitors,″ Bernardo Dominguez, the executive chairman of DSC, said in a joint statement with Aoki.
Company chairman Hiroyoshi Aoki said ″we look forward to collaborating with Mr. Dominguez to continue to grow the Westin chain worldwide,″ although it didn’t explain why Aoki was selling.
Aoki also owns the Caesar Park hotel chain and a number of independent luxury hotels. Its purchase of the Westin chain from the parent of United Airlines in October 1987 was one of the biggest Japanese takeovers of an American business.
Its move to sell comes against a backdrop of rising financial pressures on many Japanese companies because of Japan’s prolonged economic downturn, which has been particularly harsh on property developers and banks.
Last November for example, Muramoto Construction Co., a property contractor in central Japan, sought bankruptcy protection with a reported $5.5 billion in debt, in what was then described in the Japanese press as the biggest bankruptcy in Japan since World War II.
Many big Japanese banks banks that willingly lent money for development in the 1980s have since stopped.
Westin operates more than 700 luxury hotels and resorts in 19 countries. Its properties include The Westin Resort on Hilton Head Island, The Arizona Biltmore in Phoenex, and Las Brisas in Acapulco.