Following a full year of negotiations, the two hotel giants have finalized the necessary details and are set to close the long-anticipated deal Friday, Sept 23
The Chinese Ministry of Commerce has given its approval of a $13.6 billion merger between both brands, the final regulatory approval required to complete the merger after the companies secured approvals from the United States and Canada, along with 40 other countries.
The delay was in part due to an unexpected bidding war between Marriott International, Inc and Anbang Insurance Group. Marriott initially offered $12.2 billion to acquire Starwood Hotels and Resorts Worldwide, Inc. last November. When Anbang decided to offer a higher cash buyout, Marriott was forced to enter into a bidding war, until Anbang eventually walked away.
The move will put Marriott's brands, including Ritz-Carlton, together with Starwood's Sheraton and Westin chains. Starwood operates 10 brands — St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Tribute Portfolio, Four Points by Sheraton, Aloft, Element, plus a partnership with Design Hotels. The end of the transaction will create the largest hotel group. The super hotel chain will be the world’s largest hotel brand, operating 5,500 hotels and 1.1 million rooms, spread out over nearly 30 brands in 14 of the world's top 20 destinations. Marriott hotels will gain greater access to markets such as Europe and Latin America, as well as helping compete with apartment-sharing startups.
As Starwood is being acquired by Marriott, the brand’s stock has ceased trading on the New York Stock Exchange as of end of day yesterday. Starwood shareholders will receive a payout of $21 and 0.80 shares of Marriott stock for each Starwood share they hold.
The next chapter of will begin after the close, both companies will be mainly focused on integrating their businesses. Of main concern is the combining of the hoteliers' rewards programs. Marriott’s an estimated 1 cent per point while Starwood’s rewards offer approximately 2.5 cents. This has caused reward members to raise questions whether Marriott would lower the worth of Starwood’s loyalty points after the acquisition. However, in a letter from Arne Sorenson, the Marriott CEO reassures members that this will be anything but the case.
Instead the companies plan to “draw upon the very best of both Marriott Rewards and Starwood Preferred Guest® (SPG®) to provide even more value to our members”, says Sorenson.
Marriott will remain headquartered at its home in Maryland, although Marriott may relocate its headquarters elsewhere in the Washington region sometime in the future.