The pharmaceutical merger deal is estimated to be worth $116 billion. Separately, they will also get $7.80 per Starwood share upon completion of a spin-off of the company’s timeshare business to Interval Leisure Group. Starwood shareholders would own approximately 37 percent of the combined company’s common stock.
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Shares of Hyatt were up 3.5% in afternoon trading in NY.
Sorenson would remain president and chief executive of Marriott. “The options have been going down for many years and this is a huge consolidation in the industry”. Most experts took that to mean the company would go up for sale. However, Intercontinental swiftly quashed the rumors by denying any interest in acquiring the hospitality giant.
Once combined, Marriott and Starwood would boast over 75 million members in their loyalty programs. However, talks ended, and the deal never came about.
Today, the speculation was quieted as a purchase deal was announced for the hotelier.
The sources, who asked not to be identified because they were not authorized to speak on the record, said that Starwood left “no stone unturned” in its process of seeking a buyer.
The combined company will put together a total of 30 brands, though Mr Sorenson said he thinks the brands will be kept, with “some marginal places where brands are brought together”. This will provide Marriott with a wider presence in global markets. Marriott also owns major brands like Renaissance Hotels, Delta Hotels and The Ritz-Carlton. “Marriott gives us that opportunity”. A number of hotel companies are also facing growing competition from newer, internet-based rivals such as Airbnb.
The investigation concerns whether Starwood’s board of directors failed to adequately shop the Company and obtain the best possible value for Starwood’s shareholders before entering into an agreement with Marriott. Marriott expects $200 million in annual cost synergies by leveraging general and administrative and operating costs, and once factoring that in, the offer price appears fair.
Marriott worldwide and Starwood Hotels and Resorts signed a $12.2 billion deal on Sunday to combine the two companies and create the world’s largest hotel company. Its headquarters will be in Bethesda Maryland. Its set of brands, including W, Westin and Sheraton, are well-known yet relatively limited when compared with competitors’ portfolios.
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Starwood Hotels & Resorts Worldwide has more than 1,270 properties in a few 100 countries and over 180,000 employees at its owned and managed properties. The timeshare transaction should be complete prior to the Marriott-Starwood merger closing.
