An announcement was made very early yesterday, which stunned the hotel and travel industry. Marriott, which is already one of the largest hotel groups in the world, announced a super Marriott merger, where the Company is looking to acquire Starwood Hotels for $12.2 Billion. Starwood hotels, whose brands include the W, Westin, Sheraton, Aloft and the St. Regis, will accept $72.08 a share in cash and stock from Marriot, should the deal be approved by industry regulators. This merger would officially create the world’s largest hotel company, with more than 5,500 owned or franchised hotels, with 1.1 million hotel rooms located around the world. Revenues from these combined hotels would bring more than $2.7 Billion in revenue for the 12 months ending September 30th.
“The driving force behind this transaction is growth,” Arne Sorenson, the Marriott president and chief executive, said in a news release. “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.”
The new super Marriott merger now gives the Company a presence in more than 100 countries around the world, including a greater presence in Europe, Latin America, and Asia.
The deal is expected to pass regulator’s and shareholder’s approval by mid-2016 and three Starwood executives will now join the Marriott board of directors, which will be expanded to 14 members. Under the terms of the deal, Starwood shareholders will receive 0.92 shares of Marriott’s stock, as well as $2 in cash, for each share of Starwood owned.
The super Marriott merger is a perfect example of global growth in the tourism industry. In the words of Adam Aron, Starwood’s chief executive, “Today, size matters.” In order to better compete in the global tourism industry, the bigger the company, the more access to new travelers and monetary opportunities.