The Merger Between Marriott & Starwood Has Been Finalized

It has been an exciting few months for Starwood, as Marriott and Anbang have been bidding against one another for control:

  • Last November, Marriott agreed to purchase Starwood, with each share of Starwood stock being worth 0.92 Marriott shares plus $2 in cash
  • Then in March, Chinese insurance group Anbang made an offer of $78 in cash per share, which Starwood accepted
  • Then days later, Marriott made an offer which Starwood accepted, where each share of Starwood stock was worth 0.8 Marriott shares plus $21 in cash
  • Then a couple of weeks ago, Chinese insurance group Anbang made an offer of $82.75 in cash; while it wasn’t immediately accepted, Starwood’s Board of Directors indicated it was “reasonably likely to lead to a superior proposal”
  • About a week ago, Chinese insurance group Anbang withdrew their offer for Starwood due to “various market considerations,” meaning the merger between Marriott and Starwood was back on

Marriott-Starwood-Merger

Technically another company could have still bid for Starwood until the two companies had their shareholder vote, which happened today. And with that it’s official — the merger between Marriott and Starwood will happen, and is expected to close midyear. Per a press release from both Marriott and Starwood:

Marriott International, Inc. (NASDAQ: MAR) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announced that at separate special stockholder meetings today the stockholders of both companies approved proposals relating to Marriott’s acquisition of Starwood, which will create the world’s largest hotel company. Holders of over 97 percent of Marriott shares present and voting at the meeting, representing over 79 percent of outstanding shares, voted in favor of a proposal to issue shares of Marriott common stock in connection with the transaction, and holders of over 95 percent of Starwood shares present and voting at the meeting, representing over 63 percent of outstanding shares, voted in favor of a proposal to approve the transaction.

The merger is expected to close midyear, but don’t expect things to change radically overnight, even at that point. What many of us are most curious about is what this means for Starwood Preferred Guest and Marriott Rewards. Here’s part of the email Starwood sent out to SPG members, indicating that the two brands won’t launch a “newly combined program” until 2018:

Since the original announcement, our members have asked many questions about the future of Starwood Preferred Guest® (SPG®). Soon we will begin the long journey to integrate the very best of SPG and Marriott Rewards®. Through this process, your perspective will help guide these discussions as we consider the following:

  • How do we continue to deliver the unique experiences, benefits and rewards you’ve come to expect both in and out of our hotels and resorts?
  • How do we take full advantage of the extraordinary new range of hotels, resorts and destinations that will be the hallmark of a combined Starwood and Marriott to add new recognition and benefits for you?
  • How do we protect the value of your currency and status, whether your Starpoints® balance, lifetime status or membership level?

Getting answers to these complicated, important questions will take time. In fact, we don’t anticipate launching a newly combined program until 2018. This means SPG will continue to run separately until then. In the meantime, we’re actively exploring ways to build bridges between the two programs to further enhance your experience.

While I wouldn’t read too much into it, it’s interesting to note that they’re using the term “newly combined program,” rather than simply suggesting that this is the point at which SPG may be folded into Marriott Rewards. That may simply be an inclusive term used to make Starwood Preferred Guest members feel better about the merger. Or maybe there’s actually some substance behind it, and the new program will be a hybrid between SPG and Marriott Rewards… we can hope.

Merger

Bottom line

While many of us were holding out hope that Starwood would be taken over by Anbang or another company which would allow Starwood to operate independently, any hope of that happening is now gone. The best we can hope for is that the merged brand takes the best of both companies rather than the worst of both companies. While management is saying all the right things, based on previous mergers, it seems naive to think this one will be any different.

Comments

  1. I’m thrilled. Not. Yet another merger, yet another step forward to a one world: one airline, one hotel chain, one pharmacy chain, one supermarket chain, one office supply chain, one bank, one telephone company, one cable TV company, one airline manufacturer, one, one, one. They call it ‘synergy’, I call it b.s. So long, Starwood – and Marriott. Will now use Hyatt and Hilton – until they too are swallowed up, then it’ll be carrying a tent on my trips.

  2. Email from Marriot reward stating the same thing, both program will run in parallel for some time after the merger:

    “After we become one company, we expect to run parallel loyalty programs while we engage in the complicated work of integration. During this period, there is no change to how you manage your Marriott Rewards account or book reservations, and you will maintain your existing member benefits for some time.

    The good news is that we have many possibilities ahead of us because Marriott and Starwood both have great loyalty programs. We intend to draw upon the very best of both Marriott Rewards and Starwood Preferred Guest® (SPG®) to provide even more value to our members.”

    Sounds like a new plan is in the work, until shareholders complaint about earning then devaluation & cutting benefits start…

  3. @me…what a racist…

    So, Marriott didn’t get a sweetheart deal and had to pay closer to fair market value. They didn’t blink and THEN overpay after the Chinese shadow consortium…sorry “dental office”, goosed the bid and then chickened-out.

    Why is it racists always seem to show-off how they occupy the lower bands of the IQ ranges??

  4. You’re wrong that it’s finalized. There are still some regulatory approvals needed. The deal won’t be final until all government approvals have been obtained and Marriott pays out the money to buy SPG’s shares.

  5. The merger is not finalized. Regulatory clearances are necessary from the Chinese and European govt.

  6. Hooray for the stockholders! Too bad for the traveling public.Why? Because less competition means Stariott stockholders can now pull the money out of your wallet without having to compete against the other half of the conglomerate.

  7. As a multi year platinum and 100 night stayer, I haven’t received any email from Starwood . Funny, they always send their promotional crap, but nothing on this. Oh well.

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