Marriott International has signed a $12.2bn agreement to acquire Starwood Hotels & Resorts Worldwide.
Combining Starwood’s international brands with Marriott’s presence in the luxury and select-service tiers, the acquisition is expected to create the world’s largest hotel company.
Starwood shareholders will receive 0.92 shares of Marriott International class A common stock, and $2.00 for each share of Starwood common stock.
The combined entity is expected to have 1.1 million rooms in more than 5,500 hotels, spread across more than 100 countries.
Marriott International president and CEO Arne Sorenson said: "The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace.
"This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders."
Scheduled for completion in mid-2016, the transaction is subject to Marriott and Starwood shareholders’ approvals, and the satisfaction of other customary closing conditions.
Starwood Hotels & Resorts Worldwide board of directors chairman Bruce Duncan said: "Our board concluded that a combination with Marriott provides the greatest long-term value for our shareholders and the strongest and most certain path forward for our company.
"Starwood’s shareholders will also receive the value of the previously announced sale of our vacation ownership business to Interval Leisure Group, which is not part of this transaction."
Image: The combined company is expected to have 1.1 million rooms in more than 5,500 hotels. Photo: courtesy of Marriott International, Inc.