US-based Marriott International has purchased Starwood for $12.2 billion creating the world’s largest hotel chain.
The boards of directors of both companies unanimously approved the merger, under which the companies will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
A statement issued by Marriott explained: “Marriott International, Inc. (NASDAQ: MAR) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announced that the board of directors of both companies have unanimously approved a definitive merger agreement under which the companies will create the world’s largest hotel company”
“The transaction combines Starwood’s leading 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, creating a more comprehensive portfolio. “The merged company will offer broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders. Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide”
According to Marriott CEO Arne Sorenson, Marriott began looking at the acquisition as soon as Starwood announced its strategic alternative plan seven months ago. “We thought it was expensive and initially backed away from it,” Sorenson said. “But as the months went by we saw a relative shift in values of the companies.” The relative shift was a 15% downturn in the value of Starwood’s stock. At that point, “We became more and more convinced that there was value we could create having the two companies pulled together,” Sorenson said.
