Marriott International Completes Acquisition of Starwood Hotels & Resorts Worldwide.

Brief History of the Companies Involved
Marriott International
Marriott International, Inc., refers to an American global diversified hospitality business managing and franchising a wide range of portfolio of vacation homes and hotels as well as associated lodging facilities (Eisen, 2014). It is the largest hotel company in the world based in Bethesda, Maryland. It has over 5700 properties within over 110 countries across the globe. It engages in the operation and franchising of the hotels. In addition, it licenses the ownership of vacation resorts. It was set up by J. Willard Marriott in 1927 and is presently led by Bill Marriott, his son, who is the current Executive Chairman as well as President and CEO Arne Sorenson. As of 23rd September 2016, it had 1.2 million rooms as well as additional 195000 rooms within the development pipeline (Eisen, 2014).
The splitting of the Marriot Corporation in 1993 led to the formation of Host Marriott Corporation and Marriott International. It acquired a 49 percent interest in Ritz-Carlton Hotel Company LLC in 1995. Marriott International stopped smoking within its premises in 2006 and excluded pornography in the entertainment offer at its new hotels in 2011. It was fined $600,000 in 2014 by the US Federal Communications Commission for unlawfully using the containment feature of the Wi-Fi monitoring system in deliberately interfering with the networks owned by clients that drew adverse publicity. It acquired Delta Hotels, Canadian hotel chain in 2015. However, it announced on 16th November 2015 that it was going to acquire the Starwood Hotels and Resorts Worldwide.
Starwood Hotels and Resorts Worldwide
Starwood Hotels and Resorts Worldwide refers to the American leisure and Hotel Company founded in 1969 as a REIT and 1980 as a corporation (Burkitt, 2012). It is headquartered in Stamford, Connecticut. It is one of the largest hotels in the world. It engages in the owning, operating, franchising and managing of resorts, residences, hotels, spas and vacation ownership properties under the 11 brands. It has 1200 properties with 180400 employees as of December 2014 (Burkitt, 2012). Marriot International announced the purchase of Starwood on 16th November 2015 for 13.6 billion.
The Starwood’s brands include Westin, Aloft, Sheraton, Element, Le Meridien, The Luxury Collection, Tribute Portfolio, and St. Regis among others. It established a credit card partnership with American Express in 2010 (Burkitt, 2012).
– Date the Merger/Acquisition Closed (Not the Date it was announced to the public)
The merger/acquisition between Starwood Hotels and Resorts Worldwide and Marriott International was closed on 23rd September 2016. The deal led to the biggest hotel company worldwide with more than 5700 properties, a new portfolio of around 30 brands and 1.1 million rooms (Eisen, 2014).
After the merger, Marriott will get annual cost synergies of about $250 million within the first two years. However, the shareholders of Starwood will get superior value; the capability of closing the deal faster and the possibility for creating value which would allow the shareholders of both companies to reap maximum benefits from the improved financial position (Eisen, 2014).

-General Terms of the of Marriott International and Starwood Hotels and Resorts Worldwide Merger
Acquisition Price – discuss whether shares issued or cash paid.
The merger or acquisition between the two hotels, Starwood Hotels and Resorts Worldwide was to the tune of $13.6 billion. The merger will give Marriot International a massive non-USA presence; that is approximately 75 percent of the earnings and revenues of Starwood comes from the foreign markets (Eisen, 2014).
The merger or acquisition terms clearly spells out that there are shares issued or cash paid. The shareholders of the Starwood Hotels and Resorts Worldwide will get cash of $21 as well as 0.80 shares of the Class A common stock of Marriott International for every share of common stock of the Starwood Hotels and Resorts Worldwide. When the time share business is excluded, the transaction estimates the value of Starwood at approximately $13.6 billion or a per share value of $79.53. This value consists of $10 billion of the stock of Marriott International in addition to $3.6 billion of cash which is on the basis of the 170 million outstanding common shares of Starwood Hotels and Resorts Worldwide. As part of the deal, the shareholders of Starwood will own 34% of the common stock of the combined company after the merger is completed, based on the shares outstanding at the moment (Eisen, 2014).

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