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Marriott International to acquire Starwood Hotels & Resorts Worldwide, creating the world's largest hotel company
18/Nov/2015
BETHESDA, MD. and STAMFORD, CONN. - Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, Inc. announced that the boards of directors of both companies have unanimously approved a definitive merger agreement under which the companies will create the world's largest hotel company. The transaction combines Starwood's leading lifestyle brands and international footprint with Marriott's strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio. The merged company will offer broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders. Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company's pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7 billion.



Leveraging Operating Efficiencies: Marriott expects to deliver at least $200 million in annual cost savings in the second full year after closing. This will be accomplished by leveraging operating and G&A efficiencies.
Accretive to Earnings: Marriott expects the transaction to be earnings accretive by the second year after the merger, not including the impact of transaction and transition costs. Earnings will benefit from post-transaction asset sales, increased efficiencies and accelerated unit growth.
Significant Capital Recycling Program: Marriott expects Starwood to continue its capital recycling program, generating an estimated $1.5 to $2.0 billion of after-tax proceeds from the sale of owned hotels over the next two years. The hotels are expected to be sold subject to long-term operating agreements.
Continued Strong Returns to Shareholders: On a pro forma combined basis, Marriott and Starwood generated $2.7 billion in fee revenue in the 12 months ending September 2015. In 2015, Marriott expects to return at least $2.25 billion in dividends and share repurchases to shareholders. Marriott believes it can return at least as much in the first year following the merger.
Accelerated Global Growth: Marriott International expects to accelerate the growth of Starwood's brands, leveraging Marriott's worldwide development organization and owner and franchisee relationships. The combined company will have a broader global footprint, strengthening Marriott's ability to serve guests wherever they travel.
Lifestyle Leader: Starwood's first-mover advantage in the lifestyle category, along with Marriott's broad range of brands in this segment, positions the combined company as a leader in the lifestyle space. With Marriott's strong owner and franchisee relationships, the combined company expects growth of its lifestyle brands to accelerate.
World-Class Associates: This combination brings together two of the most talented teams in the industry. Together, they will combine their innovative ideas and service commitment to deliver unforgettable guest experiences.
Leading Loyalty Programs: Today, Marriott Rewards, with 54 million members, and Starwood Preferred Guest, with 21 million members, are among the industry's most-awarded loyalty programs, driving significant repeat business. They should be even stronger when the companies merge.
- See more at: http://www.traveldailynews.com/news/article/69052/marriott-international-to-acquire-starwood#.dpuf
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