The merger of Marriott International and Starwood Hotels & Resorts, which will create the world's largest hotel company, is set to go ahead after the Chinese-based Anbang Insurance Group withdrew its offer for Starwood.
Anbang, which was leading a consortium comprising private equity companies JC Flowers & Co and Primavera Capital, abandoned its attempt to acquire Starwood last night nearly three weeks after it entered the race to buy the portfolio of 1,300 hotels. It said it was stepping away from the frenzied negotiations due to "market considerations".
Now the deal involving Marriot's acquisition of Starwood, which was first announced in November 2016, is back on. However, the price has moved up considerably as a result of Anbang gatecrashing the merger talks and pushing up the price, to the delight of shareholders. The original agreed bid of $12.2b (£8b) has now risen to $13.6b (£9.5b).
Marriott and Starwood are now encouraging shareholders of both companies to vote in support of the merger at respective meetings on 8 April. If agreed, the deal will create a hotel giant of 1.1 million rooms across more than 5,500 hotels, involving 30 brands.
Arne Sorenson, president and chief executive officer, Marriott International, said the company was committed more than ever to complete the deal, which will lead to accelerated global growth. "We are focused on maximising shareholder value and from the beginning of this process we have been steadfast in our belief that a combination with Starwood will offer the highest value to all shareholders."
Bruce Duncan, Chairman of Starwood's board, added: "We continue to be very excited about the combination of our two companies and are committed to completing this deal in an expeditious manner."
If the shareholders vote in favour of the deal, the new company is expected to be in operation by the middle of 2016.
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