U.S.-based hotelier Marriott International announced Monday that it has agreed to buy Starwood Hotels & Resorts Worldwide, Inc. for $12.2 billion in cash and stock.
The acquisition will create the world’s largest hotel company, which will include three Cayman Islands hotels: the Marriott Grand Cayman Beach Resort, The Ritz-Carlton, Grand Cayman and the Westin Grand Cayman.
When the acquisition is finalized, nearly 1,400 people will be employed by Marriott International hotels in the Cayman Islands. That amounts to almost one-third of the total number of people employed by the hotel and restaurant industry in the country – 4,300, according to the spring 2015 Cayman Islands Labour Force Survey Report.
The Westin Grand Cayman, presently operated by Starwood, has 279 employees, while The Ritz-Carlton, Grand Cayman employs around 800 people, and the Marriott Grand Cayman Beach Resort employs 320.
Marriott International currently operates and franchises 19 hotel and resort brands in 85 countries, including The Ritz-Carlton and Marriott hotels. Combined with Starwood, the company will have 1.1 million rooms in more than 5,500 hotels and 30 hotel brands worldwide.
“This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace,” Marriott International CEO Arne Sorenson said in a press release. “This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders.”
Under the terms of the deal, Starwood shareholders will receive 0.92 shares of Marriott International, Inc., and $2 in cash for each share of Starwood stock.
Starwood shareholders will also receive an additional $7.80 a share from the separate merger of Starwood’s timeshare business with Interval Leisure Group.
According to The New York Times, Starwood interim CEO Adam Aron said in April that the company was working on strategies, including a sale, as its stock was trading behind other hotel groups.
“Our board concluded that a combination with Marriott provides the greatest long-term value for our shareholders and the strongest and most certain path forward for our company,” Bruce Duncan, chairman of Starwood’s board of directors, said in a press release.
Mr. Aron said in the press release that guests and customers will “benefit from so many more options across 30 hotel brands.”
“We are also delighted that our associates will have expanded opportunities as part of a larger organization that is consistently recognized as one of the best companies to work for in the world.”
Westin Grand Cayman General Manager Morty Valldejuli said there are “no changes at all at this time” to the hotel’s operations.
The transaction, subject to shareholder approval, completion of Starwood’s planned disposition of its timeshare business, regulatory approvals and other customary closing conditions, is expected to close in mid-2016.