Aoki Corp., a large Japanese developer that owns Westin Hotels & Resorts, said Monday that it has agreed to sell a large portion of the lodging chain to a Mexican conglomerate for $708 million.
The sale 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 that 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 Mexico City-based construction and real estate firm with interests in hotels and travel agencies.
Westin currently owns and operates 70 properties worldwide, including the Westin Bonaventure in downtown Los Angeles, the Century Plaza Hotel & Tower in Century City and Westin South Coast Plaza in Costa Mesa.
Aoki, which purchased Seattle-based Westin more than six years ago for $1.53 billion in partnership with the Bass Group of Texas, will retain Westin's properties in Asia, 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.
Eisaku Murakami, a spokesman for Aoki Corp., said the Japanese recession was not "a direct cause for this decision. The purpose is to reorganize our hotel business."
"By reorganizing its hotel business and selling hotels, the Aoki group can improve its cash flow and earnings," Murakami said.
Aoki's 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.
Several other Japanese companies also went on a worldwide hotel buying spree during the late 1980s.
"It has not worked out great for them," Bruce Baltin, a lodging industry analyst, said of Japanese hotel investment. "They came into the market late. They just paid too much."
Times staff writer David Holley in Tokyo contributed to this report.