Last updated: 04:45 PM ET, Mon March 21 2016

Marriott, Starwood Sign Amended Merger Agreement

Hotel & Resort | Patrick Clarke | March 21, 2016

Marriott, Starwood Sign Amended Merger Agreement

Image courtesy of Marriott

Marriott International and Starwood Hotels & Resorts Worldwide announced Monday that they have signed an amended merger agreement in wake of the recent takeover offer put forth by a consortium led by China's Anbang Insurance Group.

Under the amended merger agreement, Starwood's shareholders will receive $21.00 and 0.80 shares of Marriott common stock for each share of Starwood common stock.

What's more, the revised terms value Starwood at $13.6 billion.

Marriott originally agreed to acquire Starwood in a blockbuster $12.2 billion deal in November 2015. However the consortium — comprising Anbang an private equity firms J.C. Flowers & Co and Primavera Capital Ltd. — came in with a $13 billion-plus takeover offer last week.

On March 18, Starwood's board of directors deemed the offer a "superior proposal" to Marriott's and announced its intention to terminate the original agreement.

But as part of the original agreement, Marriott had five business days to present revised terms and Starwood was required to negotiate in good faith. The result was an amended agreement. 

And because the consortium's offer no longer represents a superior proposal, Starwood cannot engage in additional negotiations or discussions with the Anbang-led group.

The two companies' special stockholder meetings scheduled for March 28 will now take place on April 8. Pending the other necessary approvals, Marriott and Starwood still anticipate the merger will be completed in mid-2016.

Marriott also increased its targeted annual cost synergies within two years of closing from $200 million to $250 million.

"After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities," Marriott President and CEO Arne Sorenson said in a statement.

"We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment," said Bruce Duncan, Chairman of Starwood's board of directors.


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