Home Hotels & MICE Marriott surprises industry by buying Starwood

Marriott surprises industry by buying Starwood

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$12.2 billion deal to create the world’s largest hotelier
Following a great deal of speculation about a possible tie-up between Starwood and, initially, Intercontinental Hotels Group, then later Hyatt, a deal has been announced between Starwood and Marriott International.
Marriott will buy its rival Starwood for $12.2 billion, creating the world’s largest hotelier. The acquisition was approved unanimously by the boards of both companies and must now be approved by investors.
If completed, the stock-and-cash deal will add 50% more rooms to Marriott’s portfolio and, in the words of the website Skift, give it more unique, design-focused hotels that appeal to younger travellers.
The new giant will have 5,500 properties around the world with in excess of 1.1 million rooms. Starwood brands such as Sheraton, St. Regis, W and Westin will be brought together with Marriott’s many brands including Fairfield Inn, Marriott’s Courtyard and Ritz-Carlton.
Hilton Worldwide is the next-biggest hotel company, with 4,400 properties and 720,000 rooms. The deal comes at a time of record hotel rates and occupancy.
On CNBC’s Squawk Box on Monday, Marriott CEO Arne Sorenson (pictured) said his company began looking at the purchase seven months ago when Starwood announced its strategic alternative plan.
“We thought it was expensive and initially backed away from it,” he said. “But as the months went by we saw a relative shift in values of the companies,” namely a 15% downturn in the value of Starwood’s stock, plus Starwood revealing it would sell its timeshare business.
Skift

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