Marriott To Acquire Starwood In Mega-Deal
In a blockbuster deal announced early this morning, Marriott International, Inc. is buying Starwood Hotels & Resorts Worldwide, Inc. for $12.2 billion in a stock and cash deal, the two hotel companies said.
Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
Both hoteliers’ boards of directors have unanimously approved the merger agreement. Under the terms of the agreement, at closing, Starwood shareholders will receive 0.92 shares of Marriott International, Inc. Class A common stock and $2.00 in cash for each share of Starwood common stock.
In April, Starwood’s board said it would explore more strategic options to grow the company, which led to speculation of a potential merger and set off rumors of Starwood potentially merging with Hyatt Hotels Corp. or Intercontinental Hotels Group (Holiday Inn).
"During our comprehensive review of strategic and financial alternatives, it was clear that our talented people, world-class brands, global leadership and spirit of innovation were much admired and key drivers of our value. Our board concluded that a combination with Marriott provides the greatest long-term value for our shareholders and the strongest and most certain path forward for our company,” Bruce Duncan, Chairman of the Board of Directors of Starwood Hotels & Resorts Worldwide, said in a statement.
“Starwood shareholders will benefit from ownership in one of the world's most respected companies, with vast growth potential further enhanced by cost synergies. Starwood's shareholders will also receive the value of the previously announced sale of our vacation ownership business to Interval Leisure Group, which is not part of this transaction."
The deal will bring together Starwood's brands, which include Westin, W and St. Regis, with Marriott's two dozen brands including Marriott's Courtyard, Ritz-Carlton and Fairfield Inn.
Marriott Rewards, with 54 million members, and Starwood Preferred Guest, with 21 million members, are among the industry's biggest loyalty programs. The programs will be merged into one.
"The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace,” Arne Sorenson, President and Chief Executive Officer of Marriott International, said in a statement. “This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders. Today is the start of an incredible journey for our two companies. We expect to benefit from the best talent from both companies as we position ourselves for the future. I know we'll do great things together as The World's Favorite Travel Company."
Editor's Note: We'll have more on this breaking story throughout the day.
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