Starwood and Marriott merger goes ahead after tumultuous few days
Hospitality giants Starwood Hotels and Resorts and Marriott International has announced that their merger will go head after all, following a dramatic few days for the deal.
The revised agreement between the two conglomerates sees Starwood shares valued at US$79.53 (£55.33) apiece, in a deal that is worth US$13.6 billion (£9.5bn) overall and will create the world’s largest hotel company.
At the end of last week, Starwood announced that it was close to accepting an offer from China’s Anbang Insurance Group.
A statement from Marriott revealed that Starwood considered the Anbang proposition “superior” and was planning to “terminate the merger agreement with Marriott unless Marriott and Starwood agree on revisions to the agreement”.
This followed Anbang’s offer of US$78 (£54) per share for Starwood shareholders, making the deal worth approximately US$13.2bn (£9.2bn) in total. The deal agreed between Starwood and Marriot in November had seen Marriott offer US$72.02 (£50.12) for every Starwood share.
The deal now signed has seen Mariott significantly raise the amount Starwood shareholders receive from each share, from US$2 (£1.4) to US$21(£15).
Starwood shareholders will also receive a stake of 0.8 of a Marriott share for each of their shares, bringing the total value up to US$79.53 (£55.33) per share.
Bruce Duncan, chairman of the board of directors of Starwood Hotels & Resorts, said: “We are pleased that Marriott has recognised the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders.
"We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company.”
The merger is expected to go through by the middle of the year, permitted the agreement is approved by both stockholder groups