Starwood Hotels and Resorts has accepted a higher offer from Marriott International, valuing the chain at $13.6 billion.
Marriott’s revised offer for the group followed a rival bid from a Chinese consortium led by insurance giants Anbang last week.
Starwood had said that the consortium offer represented a “Superior Proposal” but under the terms of the original merger agreement Marriott had until March 28 to make a revised offer.
This has now been made, valuing Starwood at US$79.53 per share or US$13.6 billion (compared to the US$13.2 billion bid by the consortium).
Justifying the new offer, Marriott says that “As a result of extensive due diligence and joint integration planning, Marriott is confident it can achieve US$250 million in annual cost synergies within two years after closing, up from US$200 million estimated in November 2015 when announcing the original merger agreement”.
The statement confirming the revised agreement also points out that “Marriott and Starwood have already obtained important regulatory consents necessary to complete the transaction, including clearing pre-merger antitrust reviews in the United States and Canada”.
Commenting on the news Bruce Duncan, Chairman of the Board of Directors of Starwood Hotels and Resorts Worldwide said:
“We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders.
“We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment.
“We are also pleased with the progress the two companies have made toward closing.”
The two parties expect the deal to be completed by mid-2016.