The US hotel giant behind Westin will be bought in a $12.2bn deal by Marriott International Inc (MAR.O) to create the world’s largest hotel chain.
The combined company made up of Marriot and Starwood Hotels & Resorts Worldwide Inc (HOT.N) will together own over 5,500 hotels; 1,400 more than Hilton Worldwide, the second largest hotel chain.
The chairman of the board of directors for Starwood Hotels & Resorts Worldwide, Bruce Duncan, has 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.”
In premarket trading on Monday, Starwood shares were down 3.3 percent at $72.50 while Marriott shares were up 1.7 percent at $74.01. Shareholders of Starwood will receive 0.92 Marriott Class A shares and $2 in cash for each Starwood share.
The boards of both companies approved the acquisition unanimously, but now must be approved by investors in both hotel chains.
The deal is expected to end mid-2016.
Safiya Bashir on 16/11/2015