Starwood Accepts Latest Offer of $13.6 Billion by Marriott
- Updated: March 22, 2016
Marriott International was back on track for its acquisition of Starwood Hotels & Resorts with its latest $13.6 billion bid. This bid came following an unexpected unsolicited offer from Anbang Insurance Group from China that caused a bidding war to erupt between the two.
On Monday, Starwood announced it accepted the increased deal from Marriott. The original offer by the company, based in Bethesda, Maryland was $12.2 billion.
The revised offer has superior value for shareholders at Starwood, said the two companies in a statement that was released jointly by the two.
However, this war of bidding may not end quite yet. Anbang, which is the leader in a group of investors, can counter offer if they choose.
Under the new proposal, Marriott is offering shareholders of Starwood $21 in cash as well as 0.8 shares of Marriot stock for each Starwood share, up from the previous offer of $20 in cash and 0.92 shares for stock in Marriott for each Starwood share.
If this deal closes, it would create the largest hotel business in the world with more than 1.1 million rooms across the globe.
Arne Sorenson the CEO and President of Marriott said that he is convinced even more of the tremendous business opportunity the merger presents. That confidence added Sorenson could be seen in the higher offer we have made.
Sorenson spoke during his trip to Cuba, where he has accompanied President Barrack Obama on the president’s historic trip to the Caribbean island nation.
He emphasized the expertise Marriott has in the hospitality industry and its huge loyalty rewards program. He believes the two companies combined would save annual costs of $250 million with a two-year period of the completion of the deal.
Shareholders of Starwood and Marriott will vote on this deal April 8. If this acquisition is to go through, it is expected to close sometime during the middle of this year.
Anbang, which just two years ago acquired New York’s Waldorf Astoria for over $1.95 billion from hotel chain Hilton Worldwide, has expanded aggressively over recent years.
On Friday, it increased its offer to acquire Starwood to $13.2 billion, which was up from its original bid earlier during the week of $12.8 billion.
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