Marriott secures Chinese approval for Starwood deal

Marriott International has received approval from the Chinese Ministry of Commerce for its merger with Starwood Hotels & Resorts.

The company said on Tuesday that as this was the last regulatory approval required to complete the merger, the two groups are now able to proceed with closing the transaction and expect it to be completed before the market opens on 23 September.

Marriott International has agreed to buy Starwood Hotels & Resorts for $12.2bn in a deal that will create the world’s largest hotel company.

Under the terms of the agreement, Starwood shareholders will receive 0.92 shares of Marriott International and $2 in cash for each share of Starwood common stock.

On a pro forma basis, Starwood shareholders would own around 37% of the combined company’s common stock after completion of the merger using fully diluted share counts as at the end of September.

Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company’s pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7bn.

At 1400 BST, Marriott shares were up 0.7% to $68.34 in pre-market trade, while Starwood was up 3.4% to $77.66.