US-based Marriott International said on Monday that it had purchased Starwood for $12.2 billion, creating the world’s largest hotel chain bringing together such famous institutions as Ritz-Carlton, Renaissance, W, Westin and Sheraton.
The boards of directors of both companies unanimously approved the merger, under which the companies will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
“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,” said Marriott International CEO Arne Sorenson.
Starwood Hotels and Resorts Board of Directors Chairman Bruce Duncan said that his 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 receive 0.92 shares of Marriott International, Class A common stock and $2.00 in cash for each share of Starwood common stock, a joint statement from the companies read.
The merger “has a current value of $72.08 per Starwood share, including the $2 cash per share consideration”.
Starwood shareholders will also receive about $7.80 per share from a transaction set to close prior to the Marriott-Starwood merger closing — the spin-off of the Starwood timeshare business and its merger with Interval Leisure Group, which has an estimated value of approximately $1.3 billion.
One-time transaction costs for the merger, to be incurred over the next two years, are expected to total between $100 and $150 million.
Once shareholders from both companies approve the transaction and other regulatory approvals are met, the merger is expected to be closed by mid-2016, the statement read.
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