Starwood Hotels and Resorts Worldwide has called off plans for a takeover by China’s Anbang Insurance Group after Marriott International, which agreed in 2015 to acquire Starwood, showed up with a richer offer.
Starwood had originally accepted a $13.2 billion cash-and-stock bid from Marriott, but looked to be pulling out when Anbang, fresh off a $6.5 billion acquisition of trophy US hotel properties from the Blackstone Group private equity firm, made an all-cash offer for Starwood on March 18 worth $78 per share.
Marriott, based in Bethesda, Maryland, squared up to the Chinese conglomerate with a sweetened cash-and-stock mix worth $13.6 billion, or $79.53 per share. It’s selling Wall Street on the idea by promising higher-than-anticipated cost savings from the acquisition. From the news release:
As a result of extensive due diligence and joint integration planning, Marriott is confident it can achieve $250 million in annual cost synergies within two years after closing, up from $200 million estimated in November 2015 when announcing the original merger agreement.
The deal, which Starwood says it has accepted, is on track to be finalized later this year.
It’s been a busy few days for Starwood. The company announced March 19 that it has a deal to open three new hotels in Cuba, which is in the process of opening up to higher levels of American trade and tourism. Starwood, which owns brands including Sheraton, Westin, and W, will be the first American hotel chain to enter Cuba in nearly six decades.