Marriott International, Inc. MAR and Starwood Hotels and Resorts Worldwide HOT have declared that the European Union has given antitrust clearance to their pending merger. Last November, Marriot inked a definitive merger to purchase Starwood and create the world's largest hotel company.
Both the companies had already received the green signal from antitrust regulators in the United States, Canada and other regions. With this clearance issued in a press release by the European Commission, the merger deal is likely to close in Jul 2016.
Stockholders of both the companies approved the proposed acquisition at their individual shareholders meet in April. While 97% of Marriott’s shareholders voted in favour of the proposal, 95% of Starwood stockholders approved the merger.
Per the approved deal, Starwood’s shareholders will receive 0.8 shares of Marriott along with $21.00 in cash for each share they hold. In addition, they will receive a separate consideration from the spin-off of the company’s timeshare business – Vistana Signature Experiences. Vistana Signature Experiences was acquired by Interval Leisure Group, Inc in May this year.
On completion, the combined entity would operate or franchise about 5,700 hotels with 1.1 million rooms globally, bringing together 30 brands catering to all lodging segments.
Marriott’s move to buy Starwood shows that the hospitality industry thrives on such blockbuster deals that are critical to their success at a time when online booking is becoming important in the lodging business. Larger hotel companies, boasting economies of scale, can bargain with online travel agents like Expedia, TripAdvisor and The Priceline Group’s Booking.com for better fees.
Until the merger is legally complete, the companies will keep on operating as separate and self-governing entities.
Starwood currently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report STARWOOD HOTELS (HOT): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report INTRAWEST RESRT (SNOW): Free Stock Analysis Report BELMOND LTD (BEL): Free Stock Analysis Report To read this article on Zacks.com click here.