Marriott International is acquiring Starwood Hotels and Resorts Worldwide under a definitive merger agreement.
The former is buying Starwood Hotels and Resorts for US$12.2 billion in stocks and cash to 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 aims to broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders.
The companies are also combining their loyalty programmes. Marriott Rewards, with 54 million members, and Starwood Preferred Guest, with 21 million members, are among the industry’s most-awarded loyalty programs, driving significant repeat business.
Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. With the merger, Marriott International expects to accelerate the growth of Starwood’s brands, leveraging Marriott’s worldwide development organization and owner and franchisee relationships. The combined company will have a broader global footprint, strengthening Marriott’s ability to serve guests wherever they travel.
Arne Sorenson, president and chief executive officer of Marriott International, 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.”
Bruce Duncan, chairman of the board of directors of Starwood Hotels and Resorts Worldwide, said: “Our board concluded that a combination with Marriott provides the greatest long-term value for our shareholders and the strongest and most certain path forward for our company. Starwood shareholders will benefit from ownership in one of the world’s most respected companies, with vast growth potential further enhanced by cost synergies.”
Marriott International has more than 4,300 properties in 85 countries and territories. Marriott International reported revenues of nearly US$14 billion in fiscal year 2014.
Starwood Hotels & Resorts Worldwide has more than 1,270 properties in some 100 countries and over 180,000 employees at its owned and managed properties. Starwood is a fully integrated owner, operator and franchisor of hotels, resorts and residences under the renowned brands: St. Regis, The Luxury Collection, W, Design Hotels, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Aloft, Element, and the recently introduced Tribute Portfolio.
Marketing has reached out to Marriott and Starwood for further comments.