Marriott & Starwood Merger To Close On September 23, 2016

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The Chinese regulators today cleared the merger between Marriott and Starwood (really a takeover) that is now expected to close before market opens on September 23, 2016.

Starwood & Marriott Merger Disaster

Marriott had expected the purchase to close in late June/early July but the Chinese regulators needed more time and delayed the process.

Here’s the press release from Marriott:

Marriott International, Inc. (NASDAQ: MAR) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today announced their merger transaction has received approval from the Chinese Ministry of Commerce (MOFCOM). As this was the last regulatory approval required to complete the merger, Marriott and Starwood are now able to proceed with closing the transaction and expect the transaction to be completed before the market opens on September 23, pending satisfaction of customary closing requirements.  Upon closing, Marriott will solidify its status as the world’s largest hotel company.

In conjunction with the merger closing, Starwood expects its shares will cease trading on the New York Stock Exchange before market open on September 23, 2016.   As previously announced, Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott International, Inc. Class A common stock for each share of Starwood Hotels & Resorts Worldwide, Inc. common stock.

Assuming that the transaction closes as expected, former Starwood shareholders will be entitled to receive Marriott’s quarterly cash dividend of 30 cents ($0.30) per share of Marriott common stock that Marriott’s Board of Directors declared on September 13, 2016 and which is payable to all Marriott shareholders of record at the close of business on September 23, 2016. In that case, Starwood’s former public shareholders will not receive the dividend declared by Starwood’s Board of Directors on September 13, 2016. The dividend to Marriott shareholders, including the former Starwood shareholders, will be paid on September 30, 2016.

Conclusion

Does anybody believe that something good is going to come out of this Marriott purchase of Starwood for the consumers and frequent travelers? Haven’t we seen what all the airline mergers in the US and other part of the world have done to the competition?

I expect (based on what I have heard from some sources) that Marriott and Starwood will offer some sort of status matching between the programs and the ability to move points between them and/or using award points at each others properties.

Marriott made an announcement earlier that Starwood Preferred Guest (SPG) would continue to exist until the end of 2017. I made a piece about the issues that I believe makes these programs (Marriott Rewards & SPG) incompatible (read more here).

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