Marriott International’s acquisition of Starwood Hotels & Resorts is almost certain to go ahead, after the Chinese consortium led by the Anbang Insurance Group withdrew its offer for the hotel group.
Starwood confirmed on Thursday 31 March that Anbang has pulled out of the running “as a result of market considerations” and does not intend to make another offer.
As a result, Starwood said it will now urge its shareholders to vote in support of the proposed merger with Marriott, which would create the world’s largest hotel company.
Marriott’s bid its worth approximately US$13.6 billion, consisting of US$10bn in stock and US$3.6bn in cash. This is considerably higher than the initial US$12.2bn cash and stock bid that Starwood accepted in November 2015, but less than the US$14bn cash bid proposed – and subsequently withdrawn – by Anbang.
“Throughout this process, we have been focused on maximising stockholder value now and in the future,” said Bruce Duncan, chairman of Starwood’s board. “Our board is confident this transaction offers superior value for Starwood’s stockholders, can close quickly, and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance.”
Marriott and Starwood have both now scheduled shareholder meetings on 8 April 2016 to discuss the merger.
Arne Sorenson, Marriott’s president & CEO, commented; “We are… steadfast in our belief that a combination with Starwood will offer the highest value to all shareholders. Together, we can provide opportunities for significant equity upside and great long-term value driven by a larger global footprint, wider choice of brands for consumers, substantial synergies, and improved economics to owners and franchisees leading to accelerated global growth and continued strong returns.
“Our integration teams have been diligent in their work over the last few weeks and are more committed than ever to a timely and smooth transition,” he added.
The merger of Marriott and Starwood will create the world’s largest hotel company, with 30 brands.
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