NEW YORK • Marriott International yesterday made a roaring comeback in its battle to build the world's biggest hotel group, winning Starwood Hotels' green light for an improved bid and pushing Chinese rival Anbang Insurance to the sidelines.
Days after Starwood dumped Marriott as a merger partner in favour of an Anbang-led consortium, Starwood's board endorsed a higher Marriott offer, said both hotel companies in a joint statement.
Starwood's board decided that the revised terms "constitute a superior proposal" to the bid by Anbang, which has been making a continued push in the US hospitality industry since October 2014.
The revised Marriott cash-and- stock bid values Starwood at US$13.6 billion (S$18.5 billion), compared with US$13.2 billion in Anbang's latest bid.
Marriott is offering 0.8 of its stock for each Starwood share plus US$21 in cash per share.
Marriott has cleared pre-merger anti-trust reviews in the United States and Canada. Approvals from the European Union and China are pending.
The Marriott-Starwood deal will create the world's largest hotel chain with more than 5,500 hotels and 1.1 million rooms worldwide, giving Marriott a greater presence in markets such as Europe, Latin America and Asia, and allowing it to better compete with apartment- sharing start-ups such as Airbnb.
"Combined sales expertise and increased account coverage should drive additional customer loyalty and increase revenue," said Mr Arne Sorenson, president and chief executive officer of Marriott International. "Hotel-level cost savings should benefit owners and franchisees, including better efficiencies in reservations, procurement and shared services."
Beijing-based Anbang, which has been on its own shopping spree, agreed this month to buy a US$6.5 billion portfolio of 16 luxury properties from Blackstone Group.
Last week, Anbang, which owns New York's Waldorf Astoria, made a last-minute US$12.9 billion offer for Starwood in a bid to derail an agreement by Marriott, just weeks before a shareholder vote. An acquisition by Anbang would, however, require approval by regulators.
The sweetened bid underscored the intense interest in hotels from Chinese investors seeking to buy hard assets abroad and capture demand from the surge in Chinese travellers.
But Starwood, the owner of the Sheraton and Westin hotel brands, said yesterday that Anbang's proposal no longer constituted a "superior proposal" and that, under the revised merger agreement, it was not allowed to engage in discussions with Anbang.
Marriott and Starwood said they expect the deal to close by the middle of this year.
AGENCE FRANCE-PRESSE, BLOOMBERG