It is attempting to accomplish this by leveraging operating and general and administrative (G&A) efficiencies. That is supposed to be completed prior to the Marriott-Starwood merger.
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Marriott worldwide Inc (NASDAQ:MAR) President and CEO, Arne Sorenson is to remain as the CEO of the combined company.
The agreement with Interval Leisure supplants Starwood’s earlier-announced plan to spin off the timeshare unit.
Shares of the global lodging company are up 0.05% to $72.78 on heavy volume in afternoon trading on Monday, while shares of Starwood are lower by 4.77%. Marriott’s board of directors following the closing will increase from 11 to 14 members, with the expected addition of three members Starwood’s board.
The merged company aims to broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders.
The sources said competing bids for Starwood comprised a mix of stock and cash worth about the same as the Marriott offer.
“We became more convinced about the advantages of size by combining the two companies together”, Mr Sorenson said. “The planned acquisition will make the combined company the uncontested top hotel player”, he added.
“Starwood shareholders will benefit from ownership in one of the world’s most respected companies, with vast growth potential further enhanced by cost synergies”, he said. “This is a awful deal for Starwood shareholders”, analyst Jim Cramer said on CNBC’s Squawk on the Street.
In the deal announced Monday, both Marriott and Starwood agreed that either company would owe the other $400 million if it pursued an alternative transaction.
Lazard and Citigroup offered financial advice to Starwood, and Deutsche Bank advised Marriott. Its headquarters will be in Bethesda Maryland.
Marriott has hotels all over town including the Marriott Marquis (also knows as the “Jukebox” pictured above) and the giant JW Marriott Union Square, the San Francisco Marriott and the Courtyard downtown.
According to insiders close to the negotiations, Hyatt was wanting to buy Starwood in October.
Do you own shares of Starwood Hotels & Resorts Worldwide, Inc.
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The combined company will own or franchise more than 5,500 hotels with 1.1 million rooms worldwide and give Marriott greater presence in markets such as Europe, Latin America and Asia including India and China. Starwood has been exploring options including a sale since the February departure of longtime head Frits van Paasschen amid criticism he failed to increase the number of properties carrying Starwood’s brands quickly enough.
