Marriott International and Starwood Hotels & Resorts Worldwide have announced that the boards of directors of both companies have unanimously approved a merger agreement under which the companies will create the world's largest hotel company.
JW Marriott - Austin
The transaction combines Starwood's leading lifestyle brands and international footprint with Marriott's strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio.
The merged company will offer a broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders. Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company's pro forma fee revenue for the 12 months ended 30 September 2015 totals over $2.7bn.
Transaction costs
One-time transaction costs for the merger are expected to total approximately $100 to $150 million. Transition costs are expected to be incurred over the next two years. They cannot be estimated at this time, but are expected to be meaningful. Marriott will assume Starwood's recourse debt at the closing of the transaction.
Arne Sorenson will remain president and CEO of Marriott International following the merger and Marriott's headquarters will remain in Bethesda, Maryland. Marriott's board of directors following the closing will increase from 11 to 14 members with the expected addition of three members of the Starwood board of directors.
The transaction is subject to Marriott International and Starwood Hotels & Resorts Worldwide shareholder approvals, completion of Starwood's planned disposition of its timeshare business, regulatory approvals and the satisfaction of other customary closing conditions. Assuming receipt of the necessary approvals, the parties expect the transaction to close in mid-2016.
