New York: Marriott International Inc.’s $12.4 billion acquisition of Starwood Hotels & Resorts Inc. was approved by shareholders of both firms, cementing a deal to create the world’s largest hotel operator following a tumultuous bidding war.
Holders of more than 97% of Marriott shares voting at a company meeting, representing more than 79% of outstanding shares, voted in favour of the deal, as did more than 95% of Starwood shareholders representing more than 63% of outstanding shares, the companies said in a joint statement Friday.
Marriott offered 0.8 share and $21 in cash for each Starwood share, a deal valued at $73.42 a share based on Thursday’s closing price.
“Our teams continue to plan the integration of our two companies, and we are committed to a timely and smooth transition,” Marriott chief executive officer Arne Sorenson said in the statement. “We appreciate the stockholders’ vote of confidence in our ability to drive long-term value and opportunity as a combined company.”
The hospitality business is consolidating as the growth of online booking services and start-ups like Airbnb Inc. push hotel companies to cut costs and appeal to a broader array of travellers.
Marriott’s purchase of Starwood is the largest takeover of a hotel company since Blackstone Group LP acquired the company now known as Hilton Worldwide Holdings Inc. for $26 billion in 2007.
The combined entity will surpass Hilton to become the biggest hotel operator globally, controlling 1.1 million rooms across 5,700 properties.
Marriott, led by chief executive officer Sorenson, fought a hard battle for Starwood. The company was forced to sweeten its original bid, accepted in November, when a group led by China’s Anbang Insurance Group Co. topped it last month.
Beijing-based Anbang, which jumped into US real estate with its $1.95 billion purchase of New York’s Waldorf Astoria Hotel last year, bested Marriott again with an all-cash offer of $14 billion.
Anbang Insurance Group and its partners abruptly withdrew their offer less than a week after it was announced, clearing the way for Marriott’s acquisition.
With the purchase, Marriott will add 10 brands, including Sheraton, St. Regis and Westin, along with a global following of loyal guests.
Marriott currently has 19 brands, including its namesake chains, Ritz-Carlton and Bulgari. The new firm will gain power in negotiating commissions with online travel agents and be able to better compete with Airbnb.
The deal is scheduled for completion midyear.
The saga started early last year when Starwood put itself up for sale after lagging larger competitors in expanding the number of properties carrying its brands. It was pursued by about a dozen firms, including Hyatt Hotels Corp. and other Chinese suitors, before Marriott swooped in.