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Starwood-IHG merger talks quashed

Talks between InterContinental Hotels and Starwood Hotels & Resorts on a multibillion-pound merger/takeover to create the world’s largest hotel group have broken down.

It appears that Starwood may be conducting parallel talks with other interested parties, with US hotel group Wyndham apparently top of the list.

IHG said in a statement that it is not currently “in talks with Starwood with a view to a combination of the businesses”. IHG chief executive Richard Solomons declined to comment further.

But Mr Solomons did say that IHG’s strategy was to grow organically. He said the company had signed deals to manage 231 hotels in the first half.

Starwood has been exploring the idea of a sale since April amid slowing growth compared to rivals like Marriott. In February, chief executive Frits van Paasschen resigned over the growth problems. Since then, there’s been speculation over the future of Starwood and its big brands like the W, Westin and Sheraton.

In April, Starwood’s chairman, Bruce Duncan, told investors, “No option is off the table.”

Starwood operates 1200 properties in 100 countries and has more than 180,000 employees.

Meanwhile it is rumoured that InterContinental is weighing up the possibility of aligning with luxury chain Fairmont and Switzerland’s Mövenpick.

Starwood has a market value of about £8 billion and is now believed to be running a formal auction. Insiders said it is a target for Accor, the £7 billion French hotels giant, and America’s Wyndham Worldwide.

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