Shareholders approve Starwood Hotels - Marriott merger
11 April 2016
Shareholders of Starwood Hotels & Resorts Worldwide Inc and Marriott International Inc have approved the $13.6-billion cash-and-stock merger deal to create the world's largest hotel operator.
More than 97 per cent of Marriott shareholders and over 95 per cent of Starwood shareholders voted on Friday in favor of the deal, which was valued at $12.41 billion as of Thursday.
The deal follows the withdrrawal of the bid for Starwood Hotels by a consortium led by China's Anbang Insurance Group Co on 1 April, clearing the way for Marriott's acquisition of the Sheraton and Westin hotels operator. (See: China's Anbang drops bid for Starwood Hotels, Marriot emerges winner in bidding war)
Marriott had raised the cash portion of its offer to $21 a share and 0.80 share for each share of Starwood, up from 0.92 shares of Marriott stock and $2 in cash that Marriott had offered to pay in November.
In early March, the Anbang Insurance consortium, which also included private equity firms J C Flowers & Co and Primavera Capital Group of China, launched an unsolicited $12.84-billion bid to acquire Starwood, potentially derailing the already planned takeover of the US hotel operator by Marriott.
Starwood, operator of Sheraton and Le Meridien chains of hotels, had said that Anbang's cash offer was superior to Marriott's previously agreed cash and stock offer by nearly 15 per cent, and hence it was planning to terminate the proposed Marriott deal.
Marriott had until 28 March to come back with a higher offer or collect the $400-million breakup fee if Starwood agreed to a deal with Anbang. Starwood would also pay Marriott up to $18 million in costs incurred by Marriott in connection with financing the transaction.
The Marriott-Starwood deal would create the world's largest hotel chain with more than 5,500 hotels and 1.1 million rooms.
The combined brands would include Marriott International, Ritz-Carlton, JW Marriott, Sheraton, Ritz Carlton, the Autograph Collection, Westin, Le Meridien, St. Regis, and Aloft.
Starwood has more than 1,200 properties in around 100 countries with brands that include The Luxury Collection, W, Westin, Le Meridien, Sheraton, St. Regis, Aloft, and Element luxury hotels and resorts.
The Connecticut-based company has sold properties worth about $1.5-billion over the past two years, including its interest in Park Lane Hotel, London to Sir Richard Suttons Settled Estates.
Last April, Starwood hired investment bank Lazard to help it explore strategic alternatives including a possible sale or merger.
With annual revenues of more than $14 billion, Maryland-based Marriott has more than 4,400 properties in 87 countries and territories.
The company operates and franchises hotels under 19 brands, including: The Ritz-Carlton, Bulgari, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Delta Hotels and Resorts, Marriott Executive Apartments, Marriott Vacation Club, Gaylord Hotels, AC Hotels by Marriott, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, Protea Hotels and Moxy Hotels.