Mariott has completed its acquisition of Starwood, creating the world’s largest hotel company. 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 & Africa combined.
Beginning this week, 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.
Bruce Duncan, Eric Hippeau and Aylwin Lewis appointed to Marriott board
“Throughout our nearly 90-year history we have never stopped searching for innovative 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,” said J.W. Marriott, Jr., executive chairman and chairman of the board of Marriott International.
“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,” said Arne Sorenson, president and chief executive officer of Marriott International. “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.”
“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,” said Stephanie Linnartz, executive vice president and global chief commercial officer.
Marriott has also launched 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.
“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,” Sorenson said. “As new travel destinations emerge; Marriott can be counted on to be there.”
One-time transaction costs for the merger are expected to total approximately $140 million. According to a company statement: “Marriott intends to take the steps necessary to cause Starwood’s outstanding public debt to be pari passu with the outstanding public debt of Marriott International. Marriott remains committed to maintaining an investment grade credit rating and to continue managing the balance sheet prudently after the merger.”
New board members and shares listing
Marriott’s board of directors has now increased from 11 to 14 members, with the addition of Bruce Duncan, chairman, president and CEO of First Industrial Realty Trust, Eric Hippeau, partner, Lerer Hippeau Ventures; and Aylwin Lewis, chairman and CEO of Potbelly Corporation. 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 in cash and 0.80 shares of Marriott International, Inc. Class A common stock for each share of Starwood Hotels & Resorts Worldwide, Inc. common stock.
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.