Skift Take
Marriott was able to make an offer when many doubted it could muster what it takes.
After many pundits seemed to point to Anbang Insurance Group's proposed acquisition of Starwood Hotels & Resorts Worldwide leading to a closed deal, Starwood and Marriott International announced this morning that they agreed to an amended merger agreement, and intend to create the world's largest hotel company, as planned in November 2015.
The decision by the Starwood board to stick with Marriott seems motivated by long-term goals—a bigger, combined Starwood and Marriott will have more bargaining power in the long run against online travel agencies, and will boast more scale, with a total of 1.1 million rooms in more than 5,500 hotels around the world spread out over 30 different brands.
Bruce Duncan, Starwood chairman, said in a statement, "Marriott's revised offer provides the highest value to our shareholders through long‐term upside potential from shared synergies and ownership in one of the world's most respected companies, as well as significant upfront cash consideration. With its asset light business model, multi‐year industry leading unit growth, powerful brands, and consistent return of capital to shareholders, Marriott stock has consistently traded at valuation premiums to its public peers."
For Marriott's part, it appears that the last-minute bid from Anbang Insurance Group forced the company to re-evaluate its initial offer, which some analysts thought was undervalued to begin with.
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