A new acquisition would create the world’s largest hotel company.
Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, Inc. announced today that the boards of directors of both companies have unanimously approved a definitive merger agreement, under which the companies will create the world’s largest hotel company.
Combined, the two companies will boast approximately 1.1 million rooms in more than 5,500 hotels.
The transaction combines Starwood’s lifestyle brands and international footprint with Marriott’s strong presence in the luxury and select-service tiers, as well as the convention and resort segment, the companies said in a press release, creating a more comprehensive portfolio.
Total consideration to be paid by Marriott totals $12.2 billion consisting of $11.9 billion of Marriott International stock, based on the 20-day VWAP (volume weighted average price) of Marriott stock ending on November 13, 2015, and $340 million of cash, based on approximately 170 million fully diluted Starwood shares outstanding at September 30, 2015.
Marriott International expects to accelerate the growth of Starwood’s brands, the company said, leveraging Marriott’s worldwide development organization and owner and franchisee relationships.
Arne Sorenson will remain President and Chief Executive Officer 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.
The transaction is subject to Marriott International and Starwood Hotels & Resorts Worldwide shareholder approvals, completion of Starwood’s planned disposition of its timeshare business, regulatory approvals and the satisfaction of other customary closing conditions.
Assuming receipt of the necessary approvals, the parties expect the transaction to close in mid-2016.