Marriott won over Starwood with a sweetened bid worth more than USD 14.4 billion just days after a Chinese insurance company appeared to steal it away from the hotel chain with a more lucrative offer.
The buyout, which may still be contested by China's Anbang, would create the world's biggest hotel company and give Marriott a stable of tony properties run by Starwood, like the Hotel Del Coronado in San Diego.
Starwood, which owns Sheraton, Westin and St. Regis, over the weekend became the first US hotel operator to gain access to Cuba, a day before the arrival of President Barack Obama.
It is the first visit to Cuba by a sitting president in almost 90 years as relations between the two nations thaw.
The revised deal would give Starwood shareholders USD 21 in cash and 0.80 shares of Marriott International Inc. Class A stock for each Starwood share. Starwood shareholders are also expected to get Interval Leisure Group stock valued at USD 5.83 per share. Taken together, that would value Starwood stock at USD 85.36 per share, or about USD 14.41 billion.
Marriott has more than 4,400 properties in 87 countries and territories, under brands such as Ritz-Carlton, Residence Inn and Marriott. Starwood has nearly 1,300 properties in about 100 countries.
Just days ago, Anbang put up an offer of USD 83.83 for each Starwood share, or approximately USD 14.15 billion. Starwood stockholders would have received USD 78 in cash for each share they own plus USD 5.67 in stock for a spinoff of a vacation business.
Anbang made a dramatic entry into the US two years ago when it bought the famed Waldorf Astoria of York for almost $2 billion. Days before it contested Marriott for control of Starwood, it laid down USD 6.5 billion to acquire Strategic Hotels & Resorts Inc., which owns several high-end properties including the JW Marriott Essex House in New York and Hotel Del Coronado in San Diego.
Starwood, based in Stamford, Connecticut, offered a unique opportunity for Marriott because the hotel chain put itself up for sale.
Marriott said Monday that it is confident that it can achieve USD 250 million in annual cost savings within two years of closing on the Starwood transaction. That's USD 50 million more than in estimated in November, when it gave its initial offer to Starwood.
Marriott and Starwood still anticipate the deal closing around midyear, assuming it receives the necessary approvals. Shares of Starwood gained USD 3.68, or 4.6 per cent, to USD 84.25 before the market open. Shares of Marriott, based in Bethesda, Maryland, shed 51 cents to USD 72.65.