Marriott International has acquired Starwood Hotels & Resorts Worldwide for US $12.2bn; under this merger, the world’s largest hotel company will be created.
The transaction combines Starwood’s international footprint and lifestyle brands with Marriott’s presence in the luxury and select-service tiers, as well as the convention and resort segment.
The merged company will offer broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders, a company statement said.
Combined, the companies operate or franchise more than 5500 hotels with 1.1 million rooms worldwide. The combined company’s pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7 billion.
Arne Sorenson, president and chief executive officer of Marriott International, said: “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.”
“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,” he added.
J.W. Marriott, Jr., executive chairman and chairman of the board of Marriott International, said: “We have competed with Starwood for decades and we have also admired them. I’m excited we will add quality new hotels to our system and for the incredible opportunities for Starwood and Marriott associates. I’m delighted to welcome Starwood to the Marriott family.”
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Sorenson will remain president and CEO of Marriott International following the merger and Marriott’s headquarters will remain in Bethesda, Maryland. Marriott’s board of directors following the closing will increase from 11 to 14 members with the expected addition of three members of the Starwood board of directors.
Bruce Duncan, chairman of the board of directors of Starwood Hotels & Resorts Worldwide, said: “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.”
“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,” said Duncan.
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