Marriott Ups Offer, Wins Starwood Bid

Photo: Roland zh

After being outbid by a group led by a Chinese insurance company last week, Marriott International upped its bid and has won over Starwood Hotels and Resorts with an offer of $14.4 billion, creating the world’s largest hotel company.   
 
News broke on Friday that Starwood was ending its initial $12.2 billion deal with Marriott in favor of a $14.15 billion offer from a consortium of Chinese-based investors led by the Anbang Insurance Group. Starwood said the new offer was simply a “superior proposal” to Marriott’s.  
 
Starwood said it would accept a new offer from Marriott through March 28 and, after learning of the other bid, Marriott topped the offer from the group led by Anbang.  
 
“We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders. We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company,” chairman of the board of directors at Starwood Bruce Duncan said in a statement.  
 
Marriott’s deal increases the amount of cash being offered to Starwood shareholders. While the group led by Anbang bid $83.83 for each share, Marriott’s bid values each Starwood stock at $85.36, or about $14.41 billion total for the company.  
 
Marriott’s purchase of Starwood, which owns Sheraton, Westin, and St. Regis, will make it the largest hotel company in the world, with more than 5,500 hotels and 1.1 million rooms worldwide.  
 
In a statement Marriott president Arne Sorenson echoed what the group had been saying about the deal since the beginning, that “a combination of Marriott and Starwood is the best course for both companies.” 
 
“We are also bringing together two of the most talented and experienced teams in the industry. Together, they will combine their innovative ideas and service commitment to deliver unforgettable guest experiences,” he said.
 
The deal is not finalized, as it still needs regulatory approvals to be finished, but the companies said they expect the deal to finally close around midyear.  

In a statement to associates, Sorenson wrote that while Anbang’s group could submit another bid, no bids can be made after Starwood’s shareholder vote takes place and that Marriott has “made it clear to Starwood that the offer is aligned with the value we see in Starwood.”

The new offer also includes a break-up fee of $450 million due to Marriott if Starwood ultimately accepts another bid.