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Marriott-Starwood Merger In Jeopardy?

Since November of last year Marriott International had agreed to a merger with Starwood Hotels & A Marriott-Starwood Merger would add properties like this to Marriott's portfolioResorts Worldwide in a deal worth 12.2 billion dollars. That is until early March when a Chinese consortium, including Anbang Insurance Group Co., moved in on the deal, offering Starwood $12.6 billion, and later $13.2 billion. Marriott countered on March 21, with a $13.6 billion dollar offer. Well, not to be outdone, Anbang came back yet again on Monday, offering $14 billion dollars.
Marriott says it remains committed to the Starwood merger, and believes stockholders would benefit more with them in the long run. Marriott is moving to become the world’s largest lodging company with this merger, believing in ever expanding growth. Anbang, on the other hand, is looking to diversify their already lucrative portfolio of U.S real estate investments. The Anbang consortium’s all-cash offer might be more appealing for Starwood shareholders to Marriott’s offer which is a combination of cash and stock.
Is the Marriott-Starwood merger in jeopardy? Although Starwood has yet to change its recommendations to shareholders in support of the Marriott merger, analysts say it is possible the Anbang Consortium, which includes J.C. Flowers & Co. and Primavera Capital could go higher. The fact that Marriott has already had to bargain early on with Starwood, twice in fact, to Starwood’s favor, means this bidding war could be in the early stages.

Marriott’s Purchase of Starwood Hotels Amended

In November we blogged about the announced sale of Starwood Hotels & Resorts Worldwide to Marriott International. We closed that post with this note: “Today’s news is a good reminder that the only constant in life is change.” And earlier this week we learned that Marriott’s purchase of Starwood Hotels has been amended. Proof that we were correct about changes!
MergerStarwood had recently announced they received a superior proposal from a consortium of Anbang Insurance Group Co., Ltd., J.C. Flowers & Co. and Primavera Capital Limited. Marriott International increased their offer to Starwood in order to become the superior proposal once again. This is good news for Starwood stockholders, as the value of the deal just increased for them. This transaction is subject to the approval of stockholders for both Marriott International and Starwood Hotels & Resorts Worldwide and certain other conditions.
Sheraton ExteriorBrand names of the 1,270 Starwood Hotels that will be included in this merger include Sheraton, Westin, and St. Regis. Marriott’s hotels include over 4,300 properties worldwide such as these familiar brands: The Ritz Carlton, Courtyard, Springhill Suites, Residence Inn and Fairfield Inn and Suites.
Starwood has also announced that it expects to close on their spin-off of their vacation ownership business to Vistana Signature Experiences, Inc. and merger into Interval Leisure Group, Inc. on April 30, 2016. Fortunately for Starwood stockholders, Starwood says that no action is required by them for their stocks to merge into the Hotel Room new company. Owners of Starwood vacation properties will also not have to take any action during this time.
With the amended merger in the works, Marriott is set to become the largest world-wide chain of hotels. Time will only tell how the merger will affect all of the hotel brands that will now be coming under the Marriott umbrella. And perhaps the bigger question is, how will this merger affect the hotel industry as a whole?