Marriott International Inc.’s agreement to buy Starwood Hotels & Resorts Worldwide Inc. in a $12.2 billion deal, creating the world’s largest lodging company, signals more consolidation to come as hotel operators find being bigger is better to compete with each other and such upstarts as Airbnb Inc.
Marriott offered to pay $2 in cash and 0.92 a share of its own stock for each share of Stamford, Connecticut-based Starwood, the companies said in a statement on Monday. The combined company will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. Currently, both companies have properties across the state.
Marriott’s planned acquisition, the largest takeover of a hotel company since 2007, indicates the industry’s business model is under pressure, with companies being pushed to consolidate in an effort to cut costs and attract customers.