Marriott International and Starwood Hotels & Resorts announced a merger. A $12.2 billion transaction will create the world’s largest hotel chain. Marriott/Starwood will be able to offer 1.1 million hotel rooms in more than 5,500 hotels worldwide.
The combined company will include 30 brands – from a group of brands Marriott, and Ritz-Carlton and Renaissance Hotels & Resorts from Marriott to Sheraton, Le Meridien, St.Regis, W Hotels by Starwood.
According to the deal, shareholders will receive 0.92 shares of Starwood and Marriott $2 in cash for each share. Thus, Marriott will pay $ 11.9 billion in shares and $ 340 million – in money. After completion of the merger Starwood shareholders will hold approximately 37% of the ordinary shares of the combined company. Its estimated total fee and commission income for the year ended 30 September 2015 amounted to $2.7 billion.
Marriott plans to accelerate the development of Starwood brands at the expense of institutional resources, as well as relations with hotel owners and franchisees. In the second year after closing, the companies expect cost savings of at least $ 200 million, in particular by improving the efficiency of operations and reduce administrative and management costs. It is expected that the transaction will be completed in mid-2016
“Our philosophy is to merge these two companies as quickly as we can and run one company. But I think we will keep both brands,” Arne Sorenson, Marriott’s CEO, told CNBC.