Marriot International announced Monday that it is set to purchase Starwood Hotels & Resorts Worldwide for $12.2 billion in cash and stock on Monday, making it the largest hotel company in the world upon the deal's completion.
Together, the combined company would have 5,500 properties with more than 1.1 million rooms in 100 countries around the world, adding Starwood's brands, which include Sheraton, Westin, W and St.Regis, with Marriott's brands, including Marriott's Courtyard, Ritz-Carlton and Fairfield Inn, according to the Associated Press.
Marriot will pay $72.08 a share in cash and stock for Starwood, while Starwood shareholders would own 37 percent of the combined company.
"The driving force behind this transaction is growth," Arne Sorenson, the Marriott president and chief executive, said in a news release, according to The New York Times."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."
The announcement comes more than two weeks after Starwood spun off its time share business, Vistana Signature Experiences, and merged it with a subsidiary of Interval Leisure Group.
Starwood itself had been put on the market back in April when board chairman Bruce Duncan said the company was working on strategic alternatives, including a sale, reported CNN. Three Chinese firms had been vying to take over Starwood since then: Shanghai Jin Jiang International Hotels, China investment Group and HNA Group.
The deal terms represent a 19 percent premium over Starwood's average stock price during the 20 days ending Oct.26, when speculation about the takeover began.
The deal is expected to close mid-2016.
