Starwood Fight Ends Abruptly- Chinese Top Bidder Anbang Insurance Withdraws Offer, Marriott Wins Finally
- Posted by Newsdesk
- On 11th April 2016
- anbang, china, expansion, hotels, insurance, investment, marriott, starwood
The battle to acquire the Starwood Hotels between Marriott International and the consortium led by China’s Anbang Insurance has finally reached an ending.
The battle to acquire Starwood Hotels, fought between Marriott International and a Chinese-led consortium, has come to a conclusion following insurance company Abang’s sudden decision to withdraw its $14 billion offer. This cleared the way for Marriott, which had already signed a merger with Starwood back in November 2015, to potentially take over as the prospective new owner.
Following its unexpected retreat, Anbang Insurance released the following statement:
“We were attracted to the opportunity presented by Starwood because of its high-quality, leading global hotel brands, which met many of our acquisition criteria, including the ability to generate consistent, long-term returns over time. However, due to various market conditions, the consortium had decided not to proceed further.”
With Chinese consortium Anbang out of the picture, Marriott and Starwood are set to form the largest leading hotel operator in the world, counting 1.1 million rooms in 5,000 hotels worldwide. According to their merger agreement, Starwood shareholders would receive $21 in cash and 0.8 shares of Marriott common stock for each Starwood share. This would leave Starwood shareholders controlling approximately 34 percent of the combined company’s common stock, based on current outstanding shares.
Anbang did not provide any further reasons for walking away from negotiations. The Chinese company is currently making assertive gains in the U.S. hospitality industry, having recently acquired Strategic Hotels & Resorts from Blackstone for $6.5 billion, as well as the landmark Waldorf Astoria in New York for $1.95 billion last year.
Whilst Anbang backed away from its competition with Marriott International on this occasion, further expansion into the global hospitality industry by the Chinese insurance group can be expected in the future.
Sources: Pacific Business News, CBS News, CNBC, Bloomberg