Marriott International is close to winning a bidding war for Starwood Hotels & Resorts that would create the global hotel leader, trumping an offer from China's Anbang.
Marriott improved its November cash-and-stock offer for Starwood by more than $1 billion, to $13.6 billion, in an amended deal approved by their respective boards of directors, the companies announced in a joint statement Monday.
"The companies have signed an amendment to their definitive merger agreement that creates the world's largest hotel company," they said.
The merger would combine Marriott's more than 4,400 properties worldwide, with a portfolio of brands including The Ritz-Carlton, JW Marriott and Gaylord Hotels, with Starwood's 1,270 properties in 100 countries and the Westin and W brands among others.
The merger will help Marriott expand in China, India and Europe, regions where Starwood has a strong presence.
"After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities," said Arne Sorenson, president and chief executive of Marriott.
Marriott said it is confident it can achieve $250 million in annual cost synergies within two years after closing, raising it from $200 million estimated in November 2015 when the two announced their original merger agreement.
Marriott substantially improved the cash component of its offer. The amended deal has Starwood receiving $21 in cash and 0.8 share of Marriott stock for each share of Starwood. Under the terms of the November agreement it was $2 and 0.92 share.
On Friday Starwood had announced it favored the offer from a consortium led by Anbang of $13.2 billion, or $78 per share, and would notify Marriott that their agreed merger was off.
