Marriott Completes Starwood Merger Making The Worlds Largest Hospitality Company

 

Marriott became the largest hotel chain in September closing the 13 billion deal with Starwood Hotels Worldwide. Transaction costs for the merger are expected to total $140 million, according to Marriott (NASDAQ: MAR). Shares in Starwood ended trading before Friday’s opening bell on the New York Stock Exchange. Starwood shareholders receive 0.8 shares of Marriott stock for each share of Starwood stock, plus $21 in cash. The acquisition of Starwood Hotels & Resorts Worldwide, will combine Marriott, Courtyard and Ritz Carlton brands with Starwood’s Sheraton, Westin, W and St. Regis properties.

Thirty hotel brands will fall under Marriott’s hotel chain with the company now having 5,800 properties and 1.1 million rooms in over 110 countries. According to CNBC, Marriott now eclipses Hilton Worldwide’s 773,000 rooms and the 766,000 that are part of the Intercontinental Hotels Group family, according to STR, a firm that tracks hotel data. The WSJ wrote that Marriott estimates a costs savings of $250 million annually from the merger. The Bethesda, Md., lodging company is betting that its large size will allow it to negotiate better terms with online travel agents like Expedia Inc. and to convince more travelers to book directly on its website.

Starwood stated in April last year that it was exploring strategic alternatives, a move that opened the door for a sale. Marriott and Starwood announced their plans to merge in November, but an unsolicited offer from China’s Anbang Insurance Group Co. earlier this year sparked a tense bidding war. That contest ended in March, when Anbang abruptly withdrew its $14 billion offer with little explanation.

So how will the latest merger affect customer loyalty programs? Marriott stated that it plans to continue operating both programs at least through the next two years, before eventually phasing out SPG. “Obviously there’s a lot of work to do as it relates to combining the loyalty programs,” said Stephanie Linnartz, Marriott’s Executive Vice President and Global Chief Commercial Officer, in an interview with Travel + Leisure. “But the great thing for consumers is that right out of the gate, they will be able to link their accounts and match their status from day one.”

“We’ve got an ability to offer just that much more choice. A choice in locations, a choice in the kind of hotel, a choice in the amount a customer needs to spend,” Marriott CEO Arne Sorenson told The Associated Press in an interview. “We may have been a little too optimistic about how fast we could get this thing closed,” Sorenson stated.

 

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Jennifer Lynn

Jennifer Lynn

Jennifer is a business journalist and has over 15+ years of professional experience working in technology, financial, hospitality, real estate, healthcare, manufacturing, not for profit and retail sectors. Specializations in the field of analytics, management consulting serving global clients from medium & large scale organizations. She is a proficient and passionate business executive; manager utilizing analytics data to drive smart business decisions. Technology, Finance, Investments, Retail, Management, Consulting, Strategy. Have published on Forbes.com, Investing.com, and many others. Currently the Commercial Real Estate Contributor for Retail Solutions Advisors.