Marriott Acquires Starwood—Again

March 28, 2016

Aloft Bursa, a Starwood property

In its second reversal in five days, Starwood Hotels & Resorts Worldwide has agreed to a $13.6 billion acquisition bid from Marriott International, but the deal is far from being finalized.

On Thursday, Starwood accepted a $13.2 billion all-cash offer from a consortium led by Anbang, a China insurance firm. That quashed a $12.2 billion deal ($11.9 billion in stocks and $300 million in cash) that Starwood had made with Marriott in November. Now Anbang has until April 8 to top Marriott’s new offer.

Marriott’s new offer raised the cash portion to $21 per share from $2, valuing its new stock-and-cash offer at $79.53. The company offered $72.08 per share in November. Also, Starwood stockholders are expected to receive Interval Leisure Stock valued at $5.83 per share. So, the amount would raise to $85.36 per share, or around $14.41 billion.

Anbang’s offer also would have increased—to about $14.15 billion—because Starwood shareholders would have received an additional $5.67 per share for a spinoff of a vacation business.

If Marriott ultimately purchases Starwood, it would become the world’s largest hotel company. Marriott International has more than 4,400 properties in 87 countries, and brands such as Ritz-Carlton, Marriott and Residence Inn. Starwood’s portfolio consists of nearly 1,300 properties in approximately 100 countries, and 11 distinct brands, including St. Regis, Sheraton and Westin.

“The company [Marriott] will have a broader global footprint and the most powerful frequent traveler programs in the industry, strengthening Marriott’s ability to serve guests wherever they travel,” said Arne Sorensen, president and CEO of Marriott International, in a statement. “We are also bringing together two of the most talented and experienced teams in the industry, strengthening Marriott’s ability to serve guests wherever they travel.”