Marriott International Inc has snapped up Starwood Hotels & Resorts Worldwide for $12.2 billion (£8.02 billion pounds) to create the world’s largest hotel chain with top brands including Sheraton, Ritz-Carlton and the Autograph Collection. The combined company will have over 5,500 hotels with 1.1 million rooms worldwide, giving Marriott a greater presence in markets such as Europe, Latin America and Asia and allowing it to better compete with apartment-sharing startups such as Airbnb. About three-quarters of Marriott’s rooms are in the United States. About half of Starwood’s rooms are outside North America, but accounted for nearly two-thirds of its revenue in 2014.
“Our success has been driven by our ability to anticipate market shifts and meet those changes head on,” Marriott Chief Executive Arne Sorenson, who will lead the combined company, said on a conference call on Monday. The deal, one of the biggest since Blackstone Group LP bought Hilton Worldwide Holdings Inc (HLT.N) for $26 billion in 2007, could spark industry consolidation. Starwood shares fell as much as 8 percent to $68.96 on Monday, way below the offer price of $72.08, before closing 3.6 percent lower at $72.27. Two sources briefed on the deal said Starwood shares had rallied on media reports that the company was in talks with several potential buyers. Starwood left “no stone unturned” in its process of seeking a buyer, said the sources, who asked not to be named because they were not authorized to speak on the record. Marriott shares fell as much as 3.2 percent, before closing 1.3 percent lower, as hotel and airline stocks weakened on heightened concerns that the Paris attacks on Friday could curb travel.
