Marriot Int’l Completes Acquisition Of Starwood Hotels & Resort
…Becomes World’s Largest, Best Hotel Company With Unrivalled Guest Experience
…Brings Together 30 Leading Brands
…Appoints Bruce Duncan, Eric Hippeau, Aylwin Lewis Marriott Board Members
Marriott International, Incorporated has completed its acquisition of Starwood Hotels & Resorts Worldwide Incorporated thereby creating the world’s largest and best hotel company.
Marriott now offers the most comprehensive portfolio of brands including leading lifestyle brands, a significant global footprint and leadership in the luxury and select-service tiers as well as the convention and resort segment.
Beginning today, Marriott will match member status across Marriott Rewards, which includes The Ritz-Carlton Rewards and Starwood Preferred Guest (SPG), enabling members to transfer points between the programs for travel and exclusive experiences when they link their accounts later today.
Speaking on the development, the Executive Chairman and Chairman of the Board of Marriott International, J.W. Marriott, Jr. said, “Throughout our nearly 90-year history we have never stopped searching for fresh ways to serve our guests. With the addition of Starwood’s strong brands, great properties, and talented people, we have dramatically expanded our ability to provide the best experiences to our customers. We also welcome the tremendous responsibility as the world’s largest hotel company to be a good global steward, providing new opportunities for our associates and building the economic strength of the communities we call home.”
President and Chief Executive Officer of Marriott International, Arne Sorenson on his part said, “We believe that Marriott now has the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs, providing an unparalleled guest experience. Combining Starwood’s brands with ours better enables Marriott to reach our goal of having the right brand in the right place to serve our loyal guests and welcome new ones,”
“We can now provide a better range of choices for our guests, more opportunities for our associates, and greater financial benefits for our owners, franchisees, and shareholders,” he added
The new company will operate or franchise more than 5,700 properties and 1.1 million rooms, representing 30 leading brands from the moderate-tier to luxury in over 110 countries.
With the completion of this acquisition, Marriott’s distribution has more than doubled in Asia and the Middle East.
Best-In-Class Loyalty Programmes
Marriott Rewards which includes the Ritz-Carlton Rewards and SPG are the most recognised and awarded loyalty programs in hospitality.
Together, these programmes will offer members more benefits when they link their accounts, as well as new destinations such as Aruba, Tuscany’s Serchio Valley and Kruger National Park in South Africa for SPG members and the Maldives, Bora Bora and Santorini, Greece for Marriott Rewards and The Ritz-Carlton Rewards members.
Executive Vice President and Global Chief Commercial Officer, Stephanie Linnartz, “Marriott will draw upon the very best each program offers and we can’t wait to show the loyal members of these programs the power and benefits of Marriott and Starwood coming together.”
Marriott will launch a microsite later today, www.members.marriott.com, for all members of the combined company’s loyalty programs to learn more about the reciprocal benefits now available and to link accounts.
New Board Members And Shares Listing
Effective today, Marriott’s Board of Directors has increased from 11 to 14 members, with the addition of the former Chairman of the Board of Starwood Hotels & Resorts Worldwide, Incorporated, Bruce Duncan and President, CEO and Director of First Industrial Real Estate Trust, Incorporated Eric Hippeau, Partner, LererHippeau Ventures and Chairman and CEO of Potbelly Corporation, Aylwin Lewis.
Messrs. Hippeau and Lewis are also former Starwood board members.
Before market open today, Starwood’s shares will cease trading on the New York Stock Exchange.
As previously announced, Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott International, Incorporated Class A common stock for each share of Starwood Hotels & Resorts Worldwide, Inc. common stock.
Marriott’s acquisition of Starwood enables the combined company to expand the scope of its distribution and portfolio while deploying its larger scale to realise cost efficiencies in its corporate and property operations.
As previously stated, Marriott is confident the company can achieve $250 million in annual cost synergies.
Other synergies should come in the form of leveraging operations and sharing best practices.
Combined sales expertise and improved account coverage are expected to provide both enhanced efficiencies and increased revenue opportunities.
“These enhanced efficiencies and revenue opportunities should drive improved property-level profitability as well as greater owner and franchisee preference for the combined company’s brands, which will encourage new hotel development. As new travel destinations emerge, Marriott can be counted on to be there.” Sorenson said
One-time transaction costs for the merger are expected to total approximately $140 million. Marriott intends to take the steps necessary to cause Starwood’s outstanding public debt to be paripassu with the outstanding public debt of Marriott International by the end of 2016.
Marriott remains committed to maintaining an investment grade credit rating and to continue managing the balance sheet prudently after the merger.
Arne Sorenson remains President and Chief Executive Officer of Marriott International, and Marriott’s headquarters continues to be located in Bethesda, Maryland.
Lazard and Citigroup were financial advisors to Starwood Hotels & Resorts Worldwide and Deutsche Bank Securities and Goldman Sachs were the financial advisors to Marriott International.
Cravath, Swaine & Moore served as legal counsel to Starwood Hotels & Resorts Worldwide and Gibson, Dunn & Crutcher served as legal counsel to Marriott International on the transaction.