Starwood acquisition complete
Marriott International has completed its acquisition of Starwood Hotels & Resorts Worldwide, creating the world’s largest hotel company. The new company will operate or franchise more than 5,700 properties and 1.1 million guestrooms, representing 30 leading brands from the moderate-tier to luxury in over 110 countries. With the completion of this acquisition, Marriott’s distribution has more than doubled in Asia and the Middle East & Africa combined.
Marriott’s acquisition of Starwood will enable the combined company to expand the scope of its distribution and portfolio, while deploying its larger scale to realise cost efficiencies in its corporate and property operations. Marriott has stated that it is confident the company can achieve $250 million in annual corporate cost synergies. Additional synergies at the property level may come in the form of leveraging scale in operations and sharing best practices.
“Throughout our nearly 90-year history we have never stopped searching for innovative ways to serve our guests. With the addition of Starwood’s strong brands, great properties, and talented people, we have dramatically expanded our ability to provide the best experiences to our customers,” comments J.W. Marriott, Jr., Executive Chairman and Chairman of the Board of Marriott International. “We also welcome the tremendous responsibility as the world’s largest hotel company to be a good global steward, providing new opportunities for our associates and building the economic strength of the communities we call home.”
Before market open today, Starwood’s shares will cease trading on the New York Stock Exchange. As previously announced, Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott International, Inc. Class A common stock for each share of Starwood Hotels & Resorts Worldwide, Inc. common stock.
Following the acquisition, Marriott’s Board of Directors will increase from 11 to 14 members, with the addition of Bruce Duncan, Chairman, President and CEO of First Industrial Realty Trust, Inc.; Eric Hippeau, Partner, Lerer Hippeau Ventures; and Aylwin Lewis, Chairman and CEO of Potbelly Corporation. Hippeau and Lewis are also former Starwood board members.
Both the Marriott Rewards and SPG programmes will offer members benefits when they link their accounts, as well as new destinations including Aruba, Tuscany’s Serchio Valley and Kruger National Park in South Africa for SPG members, and the Maldives, Bora Bora and Santorini, Greece for Marriott Rewards and The Ritz-Carlton Rewards members.
One-time transaction costs for the merger are expected to total approximately $140 million. Marriott intends to take the steps necessary to cause Starwood’s outstanding public debt to be pari passu with the outstanding public debt of Marriott International.
Arne Sorenson, President and Chief Executive Officer of Marriott International concludes: “We believe that Marriott now has the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programmes, providing an unparalleled guest experience.
“Combining Starwood’s brands with ours better enables Marriott to reach our goal of having the right brand in the right place to serve our loyal guests and welcome new ones. We can now provide a better range of choices for our guests, more opportunities for our associates, and greater financial benefits for our owners, franchisees, and shareholders.”
