On Friday, a counter bid of $13.2bn for Starwood from the Angbang Insurance-led consortium, threw the proposed Marriott-Starwood merger, which would create the world's largest hotel company, into doubt.
However, today both Marriott International and Starwood, said the revised terms from Marriott constituted a 'superior proposal' compared to the consortium's bid which will now see Starwood shareholders owning approximately 34 percent of the combined company’s common stock after completion of the merger.
Marriott and Starwood will now hold special stockholder meetings on 8 April with the intention of closing the sale mid-2016.
Marriott International president and chief executive officer Arne Sorenson, said: “After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities."
Sorensen said the company was also confident it could achieve an 'updated target' of $250m of cost synergies following the higher bid.
"With a higher cash component in the purchase price, we have improved the transaction’s financial structure as well," he said.
Bruce Duncan, chairman of the Board of Directors of Starwood Hotels & Resorts Worldwide, said: “We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders. We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment. We are also pleased with the progress the two companies have made toward closing."
Following the completion of the proposed merger, which is subject to shareholder approval, Marriott said it plans to accelerate the growth of Starwood's brands, which include Sheraton and Aloft.
"On the top line, combined sales expertise and increased account coverage should drive additional customer loyalty and increase revenue. Hotel level cost savings should benefit owners and franchisees, including better efficiencies in reservations, procurement and shared services," said Sorensen. "The company will have a broader global footprint and the most powerful frequent traveler programs in the industry, strengthening Marriott’s ability to serve guests wherever they travel.
“We are also bringing together two of the most talented and experienced teams in the industry. Together, they will combine their innovative ideas and service commitment to deliver unforgettable guest experiences.”
Should the merger fall through, Starwood would now be required to pay a break-up fee of $450m and $18 of costs connected to the financing of the transaction.