BETHESDA, Maryland—Marriott International’s long-awaited acquisition of Starwood Hotels & Resorts Worldwide cleared its final hurdle Tuesday as Marriott announced the proposed deal received approval from the Chinese Ministry of Commerce.
The approval paves the way for the two companies to become one on 23 September 2016, according to a news release issued by Marriott today—18 months after then-CEO Adam Aron announced Starwood was exploring strategic and financial alternatives.
The new Marriott will be the largest hotel company in the world with more than 5,800 hotels comprising more than 1.1 million rooms in a system of 27 hotel brands. The combined company’s development pipeline will have more than 1,900 hotels with more than 333,000 rooms, according to STR, the parent company of Hotel News Now.
Marriott declined to comment on the announcement this morning; its corporate communications team said executives would be available to speak about the acquisition on Friday. Starwood executives declined to comment on Chinese approval or the expected close.
Starwood had a number of suitors during its strategic review process—including most major hotel companies—and settled on an offer from Marriott on 16 November 2015. However, the final deal for the acquisition wasn’t settled until 31 March 2016 when Beijing-based Anbang Insurance Group withdrew its all-cash bid of $82.75 per share.
That move left Marriott standing as the winner of Starwood sweepstakes with a bid that totaled $13.3 billion in stock and cash. Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott Class A common stock for each share of Starwood common stock.
According to the news release, Marriott and Starwood executives expect the deal to close before the stock market opens on 23 September.
Marriott closed trading on 19 September at $75.94 per share and was flat in early trading on 20 September. Starwood’s shares closed trading on 19 September at $75.09 per share and were up 3% in early trading on 20 September.
Once the deal is completed, the combined company will own, operate and/or franchise hotels under the following brands: The Ritz-Carlton, Bulgari, Edition, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Delta Hotels and Resorts, Gaylord Hotels, AC Hotels by Marriott, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, Protea Hotels by Marriott, Moxy Hotels, Four Points by Sheraton, W Hotels, Aloft, Sheraton, Le Méridien, The Luxury Collection, Element, Westin, St. Regis and The Tribute Portfolio.
Integrating the two companies’ powerful guest-loyalty programs is likely among the first moves the combined company will make. Marriott Rewards and Ritz-Carlton combined have a loyalty club with more than 57 million members; Starwood’s SPG program has more than 22 million members.
Arne Sorenson, Marriott’s president and CEO, said in a letter to Marriott Rewards members earlier this year that it would take time to combine the programs.
“After we become one company, we expect to run parallel loyalty programs while we engage in the complicated work of integration,” Sorenson wrote. “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. In fact, we don't anticipate launching a newly combined program until 2018.”