The merger will create the world's largest hotel company, uniting brands like Sheraton, Westin and St. Regis with the Ritz-Carlton and Courtyard. Fred Katayama reports.
Marriott booked a huge deal that'll create the world's largest hotel company. It is buying rival Starwood for $12.2 billion in cash and stock. The move will merge Starwood's Sheraton, W, and St. Regis brands with Marriott's Ritz-Carlton, JW Marriott, Renaissance, and Courtyard brands. It'll expand Marriott's global reach so it can offer 1.1 million rooms in more than 5500 hotels. CEO Arne Sorenson said in a CNBC interview Marriott will "generally" keep the brands. Starwood has been up for sale since April. Sources say potential suitors included big Chinese travel companies, and Starwood had reached out to InterContinental Hotels and Wyndham Worldwide in the summer. Starwood's flagship Sheraton Hotels has been struggling amid strong competition in the upscale segment. Marriott's offer price is just shy of what Starwood closed at on Friday. Starwood shareholders will also get money from the spinoff of its timeshare business and its merger with Interval Leisure Group.Stocks of both companies, which are down roughly 7 percent this year, fell further on news of the deal. Marriott said the merger will add to earnings by the second year after the deal closes in mid-2016.