New York: Marriott International Inc is buying Starwood Hotels & Resorts Worldwide Inc in a deal valued at $12.2bn to create the world’s largest hotel company, emerging as the surprise winner of a bidding war that reportedly included Hyatt Hotels Corp and multiple Chinese suitors.
Marriott offered to pay $2 a share in cash and 0.92 of its own stock for Stamford, Connecticut-based Starwood, the companies said in a statement. The combined company will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
“The deal makes sense from a strategic perspective,” Lukas Hartwich, an analyst at real estate research firm Green Street Advisors LLC, said in an e-mail. “Scale matters a lot in the hotel business. The winners in the long run will likely be the ones with the most hotels, in the most locations, at the most price points.”
The deal is the largest takeover of a hotel company since Blackstone Group LP bought Hilton for $26bn in 2007. 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. Starwood hired Lazard Ltd to advise it in April. In addition to competing with one another, hotel companies are also dealing with losing customers to Airbnb Inc.
At least three Chinese companies were pursuing bids for Starwood, a person with knowledge of the matter said in October. CNBC reported on October 28 that Hyatt was holding takeover talks with Starwood.
“We’re not selling for cash, we’re selling for stock,” CEO Adam Aron said. “This is the greatest long-term return for shareholders.”
Bloomberg
