Marriott made a big move this morning with its announcement to buy rival hotel chain Starwood.
The deal is worth some $12 billion as Bethesda, MD based Marriott plans to make the purchase in stock and cash.
Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company’s pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7 billion.
Starwood has been exploring the idea of a sale since at least April amid slowing growth compared to rivals like Marriot. In February, chief executive Frits van Paasschen resigned over the growth problems. Since then, there’s been speculation over the future of Starwood and its big brands like the W, Westin and Sheraton.
The deal with Marriott will not include Starwood’s timeshare business. The unit was sold off separately. As a result, Starwood shareholders will see an additional $7.80 per share from the timeshare spinoff.
Arne Sorenson, President and Chief Executive Officer of Marriott International MAR +1.37%, said, “The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace. This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders.
Source: Forbes.
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| The newly built Marriott Marquis hotel in Washington, Wednesday, Oct. 14, 2015. (AP Photo/Andrew Harnik) |
Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company’s pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7 billion.
The deal with Marriott will not include Starwood’s timeshare business. The unit was sold off separately. As a result, Starwood shareholders will see an additional $7.80 per share from the timeshare spinoff.
Arne Sorenson, President and Chief Executive Officer of Marriott International MAR +1.37%, said, “The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace. This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders.
Source: Forbes.
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