Starwood Hotels and Resorts Worldwide Inc on Monday agreed to a higher $13.6 billion (£9.4 billion) offer from Marriott International Inc, a proposal that trumped a bid by China’s Anbang Insurance Group Co.
Starwood, the owner of the Sheraton and Westin hotel brands, said Anbang’s proposal no longer constituted a “superior proposal” and under the revised merger agreement it was not allowed to engage in discussions with Anbang.
Marriott’s new stock-and-cash offer is worth $79.53 per share.
A group led by Anbang had challenged Marriott with an initial non-binding offer of $12.8 billion on March 14, revising it later to $13.16 billion, or $78 per share in cash.
A deal with Anbang would have likely faced a review by the U.S. Committee on Foreign Investment in the United States, an interagency panel that reviews deals to ensure they do not harm national security.
The Marriott-Starwood combination will create the world’s largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection. Marriott in November offered $12.2 billion, or $72.08 per, for Starwood.
The combined company will have over 5,500 hotels with 1.1 million rooms worldwide, giving Marriott a greater presence in markets such as Europe, Latin America and Asia and allow it to better compete with apartment-sharing startups such as Airbnb.
Marriott has cleared pre-merger antitrust review in the United States and Canada. Approvals from the EU and China are pending.
Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott Class A common stock for each share held, Marriott said on Monday.
Starwood shares were up 3 percent at $82.72 before the opening bell on Monday. Marriott was down 1 percent at $72.25.
Under the revised agreement, Starwood will pay a breakup fee of $450 million, up from $400 million previously.
Starwood Chairman Bruce Duncan said the company was pleased that Marriott has “recognised the value” that Starwood brings to this merger.
Anbang was not immediately available for comment.