November 16, 2015

Marriott to Acquire Starwood to Form World’s Largest Hotel Company

text Doubletree Nashville by Gettys Group, ranked as 2015 Hospitality Giant #12. Photo by Hedrich Blessing.


Marriott International and Starwood Hotels & Resorts Worldwide revealed today that the two companies will merge to create the world’s largest hotel company, boasting a combined 1.1 million rooms, in more than 5,500 hotels, located throughout over 100 countries worldwide. Together, the companies have brought in over $2.7 billion in revenue over the past 12 months (as of September 2015). “We have competed with Starwood for decades and we have also admired them. I’m excited we will add great new hotels to our system and for the incredible opportunities for Starwood and Marriott associates,” said J.W. Marriott, Jr., executive chairman and chairman of the board of Marriott International, in a statement released by the company.

The transaction is intended to offer substantial economies of scale, and is predicted to deliver significant capital returns to shareholders. “The transaction combines Starwood’s leading lifestyle brands and international footprint with Marriott’s strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio,” states an announcement released by Marriott. The joined companies will boast a powerful portfolio of 30 leading brands, many of them with properties designed by the firms ranked in Interior Design ‘s 2015 Hospitality Giants research .

“The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace. This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders,” said Arne Sorenson, president and CEO of Marriott International, in a statement released by the company. By leveraging operating and G&A efficiencies, Marriott expects to deliver at least $200 million in annual cost savings in the second full year after closing.

“We are excited to play a vital role in the creation of the biggest and best hotel company in the world with tremendous upside potential. The combination of our two companies brings together the best in innovation, culture and execution,” said Adam Aron, Starwood Hotels & Resorts Worldwide CEO on an interim basis, in a statement released by Marriott. “Our guests and customers will benefit from so many more options across 30 hotel brands, while our hotel owners and franchisees will derive value from our combined global platform and efficiencies,” said Aron.

Arne Sorenson will remain president and CEO of Marriott International following the merger and Marriott’s headquarters will remain in Bethesda, Maryland. Marriott’s board of directors following the closing will increase from 11 to 14 members with the expected addition of three members of the Starwood board of directors. The transaction is subject to Marriott International and Starwood Hotels & Resorts Worldwide shareholder approvals, completion of Starwood’s planned disposition of its timeshare business, regulatory approvals and the satisfaction of other customary closing conditions. Assuming receipt of the necessary approvals, the parties expect the transaction to close in mid-2016.

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