The Starwood-Marriott Merger May Fall Apart
We break out the possible scenarios, and what it means for you.
It’s been almost five months since Marriott set out to acquire Starwood Hotels and Resorts—at a price of $10.8 billion. Since then, they’ve cleared regulatory hurdles and made strides towards a June closing date. But all that work may soon be undone.
The Chinese investment consortium Anbang Insurance Group has just put in an unsolicited offer to buy Starwood for more than what Marriott is offering. Whereas the Marriott deal values Starwood shares at $63.74 a pop, Anbang is willing to raise the price to $76.
So what’s at stake for Anbang, Starwood, and more importantly, travelers? Anbang is making moves in the hospitality world after buying several Four Seasons, Fairmont, and Intercontinental hotels from The Blackrock Group—itself a $6.5 billion deal—just a few days before throwing its hat in the ring for Starwood. Since it’s not an operator, Anbang’s investment in Starwood would most likely keep the company’s operations at a status quo. That’s a big (potential) sigh of relief for loyal SPG guests who are worried that their points and perks will be devalued in a Marriott buyout.
The deal could also create a huge power shift within the industry: if Marriott and Starwood merge, they’ll stand to create the biggest hotel company on earth. And if they don’t, then Starwood’s indie feel may be kept intact—along with its brand portfolio, which expresses redundancies with certain Marriott flags (think Tribute Portfolio, Luxury Collection, and Autograph Collection, among others).
That doesn’t mean you should necessarily root against the Marriott-Starwood merger, either. Combining Marriott’s scale with Starwood’s knack for innovation could make for better travel experiences in every corner of the globe. Either way, travelers won’t be on the edge of their seats for long, as Starwood will have to decide which company to adopt as its parent by Thursday.