Status: Abandoned


Acquirer:  Shareco Group of America, Inc. (U.S.)/ Beijing Shareco Technologies Co., Ltd. (China)

Acquired:  Global Eagle Entertainment, Inc. (U.S.)

Value:  Approximately US$103 million

Industry:  Multimedia



UPDATE:  On July 25, 2017, Global Eagle Entertainment Inc. and  Shareco Group of America, Inc., a subsidiary of HNA Group, “terminated the Shareco Investment Agreement as a result of the parties’ inability to obtain the required approval of the Committee on Foreign Investment in the United States (CFIUS) prior to the outside date under the Shareco Investment Agreement.” (Global Eagle Entertainment Form 8-K, July 25, 2017, SEC Filing; see also Global Eagle Entertainment Form 10-Q, Nov. 9, 2016, SEC Filing.)  Global Eagle Entertainment stated that it continues “to perform under a pre-existing commercial agreement [the] provision of inflight-entertainment-and-connectivity (IFEC) equipment and services to Hainan Airlines, Beijing Capital Airlines and Yangtze River Airlines, all of which are HNA-affiliated airlines,” and will continue to discuss opportunities to expand business in China. (Id.)

Posted on July 11, 2017

Status: Withdrawn with Intent to Refile

During an investor call with the newly appointed Chief Executive Officer of Global Eagle Entertainment, Inc., Jeff Leddy, the CEO stated that the proposed joint venture with Beijing Shareco Technologies Co. was opposed by CFIUS.  (See Space News, Global Eagle says no “fraud or misconduct” behind recent exec departures, April 26, 2017.)   Mr. Leddy stated during the investor call that “CFIUS completed the initial evaluation and concluded that the deal, as originally constructed, presented unresolved national security concerns. Both parties agreed to withdraw the application with the intent to refile and exercised our CFIUS extension option under the terms of the original agreement. With the new application that we tend to file shortly, we’re exploring mitigation alternatives to address the national security issues raised by the committee. In parallel, we’re also evaluating modifications to the investment structure that may enable us to alleviate the CFIUS concerns.”  (Global Eagle Entertainment Inc. Business Update Conference Call, April 18, 2017.)  Later in the call, Mr. Leddy responded to a question about CFIUS concerns, stating that “CFIUS, first of all, doesn’t give us detailed explanations of their findings. But we don’t think it’s necessarily related to our government business per se but related to the more general scope of what our company does and the fact there’ll be a significant foreign investor, in this case, particularly a Chinese investor that is raising their concerns. But we’ll be addressing that through a remediation effort to come up with a plan that addresses the specific concerns they will have.”  (Id.)  He conclude by stating that the decision to pull and try to address CFIUS concerns with a “proper mediation plan” in a refiling “doesn’t necessarily impact our relationship with Shareco and our ability to provide services and install airplanes within the HNA fleet of aircraft,” which was one goal of the proposed joint venture with Beijing Shareco Technologies.  (Id.)

Posted on November 16, 2016

Status: Upcoming/New Filing

On November 8, 2016, Global Eagle Entertainment Inc., a Delaware Corporation that provides media content, technology, and connectivity solutions for commercial aviation and other customers in the travel industry, entered into an Investment Agreement with Shareco Group of America, Inc., a Delaware corporation, and for limited purposes as noted in the agreement, with HNA Group Co., Ltd., Beijing Shareco Technologies Co., Ltd. (the parent company of Shareco Group of America and an affiliate of HNA Group), and, upon its execution of joinder,  Bluefocus (Beijing) Investment Management Co., Ltd., whereby Shareco Group of America will acquire approximately 9.9% of Global Eagle Entertainment’s issued and outstanding common stock. (See Global Eagle Form 8-K, Nov. 14, 2016, SEC Filing; and the full agreement at Global Eagle Form 8-K, Ex-2.1, Nov. 14, 2016, SEC Filing; see also Global Eagle Entertainment Press Release, Nov. 8, 2016.)

HNA Group, Beijing Shareco Technologies and Bluefocus (Beijing) Investment Management are all limited companies organized under the laws of the People’s Republic of China. (See Global Eagle Form 8-K, Ex-2.1, Nov. 14, 2016, SEC Filing.) The agreement conditions the investment on receiving Committee on Foreign Investment in the United States (CFIUS) Approval.  (See id., Section 4.06.)  The investment is part of the parties intent to establish a joint venture “to provide inflight entertainment and connectivity in China and exclusively service aircraft operated by HNA airlines.”  (Global Eagle Entertainment Press Release, Nov. 8, 2016.)

HNA Group has been involved with a potential CFIUS filing concerning another investment of Hilton Worldwide Holdings, Inc., and as the the largest stockholder of Tianjin Tianhai Investment Company Ltd., which recently received approval for its acquisition of U.S. logistics company Ingram Micro, Inc. We have been tracking the Tianjin Tianhai/Ingram Micro filing (see our previous post here).