Marriott Acquires Starwood: The Fine Print

Marriott International’s acquisition of Starwood Hotels & Resorts will create a 30-brand hotel giant comprised of 5,500 hotels offering 1.1 million guestrooms.

The deal is slated to be completed in mid-2016, assuming shareholders of both companies approve and Starwood is still able to offload its timeshare business.

Here are the details from the financial documents detailing the potential sale.

• If the deal does not take place, Starwood will owe Marriott a termination fee of $400 million. The sale will also be called off if it isn’t accomplished by Dec. 21, 2016.
• Starwood shareholders will get 0.92 shares of Marriott International for each Starwood share they own, along with $2 in cash per share. Overall, Starwood shareholders will come to own 37 percent of Marriott shares.
• Marriott doesn’t want Starwood’s timeshare portfolio, which it had just agreed to sell off. Marriott has been informed about the deal, and Starwood will still follow through with its agreement to sell its 22-unit Vistana Timeshare Unit to Interval Leisure Group. Shareholders will be compensated for the timeshare spin-off separately from the Marriott acquisition.
• The merger doesn’t impact any ongoing individual developments or in-market sales. Marriott will examine any ongoing property deals that haven’t closed by the completion of the merger on a case-by-case basis.
• Starwood employees will get to keep their current benefits for a year following the merger. If a Starwood employee gets laid off within a year, they exit with Starwood benefits, not Marriott’s.
• Starwood gets three directors added to Marriott’s board, growing Marriott’s board from 11 to 14 members. Arne Sorenson will remain in the company’s top position as president and CEO, and Marriott will continue to operate out of Bethesda, Md. Marriott expects the integration of the two companies to lead to $200 million savings in efficiencies on the Marriott side in the two years following the deal.