A woman walks by a Marriott hotel in midtown Manhattan in New York City on March 21, 2016. (Photo : Getty Images)
Starwood Hotels and Resorts Worldwide Inc., owner of the Sheraton and Westin hotel brands, announced Monday that it has accepted an amendment merger deal worth more than $13 billion with Marriott International Inc. to create the world’s largest hotel company.
Under the agreement, Starwood shareholders will receive $21 in cash for each Starwood share, valuing the total bid, which includes stock, at $79.53 as of Friday's close of trading, according to Reuters. Marriott initially clinched a deal with Starwood in November the previous year for $72.08 per share.
"In the further diligence we have completed in last five months, we have become even more convinced of the tremendous opportunity presented by this merger," Marriott Chief Executive Officer Arne Sorenson told analysts during a conference call. "That confidence is reflected in our higher offer."
Starwood shareholders will own approximately 34 percent of the combined company's common stock after the merger, based on current shares outstanding.
Shortly after the announcement was made, Starwood shares rose nearly 4 percent at $83.79 in early trading on Monday, while Marriott was down 1.6 percent at $72.02.
"We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders," said Bruce Duncan, chairman of the Starwood Board of Directors.
The deal, which values Starwood at approximately $13.6 billion or $79.53 per share, caps the competing bid of Chinese investor group Anbang at $13.2 billion.
The agreement also prevents Starwood from communicating with Anbang, which previously made headlines in Oct. 2014 for purchasing New York's Waldorf Astoria hotel.
Had Anbang succeeded with its offer, the acquisition would have been the largest ever by a Chinese company in the United States, said Reuters. Anbang declined to comment on whether it is planning on a new bid.
Marriott said the transaction will have little effect on its earnings in 2017 and 2018.
