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  • Opinion: Spanner in the works for Marriott-Starwood deal?

    Marriott-Starwood merger
    698 400 Daniel Fountain
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    Is there about to be a spanner thrown into the works for the Marriott-Starwood merger? Recent reports – albeit very liberally-sourced ones – seemed to suggest that Marriott was feeling a sense of ‘remorse’ about the deal and was looking for a way out to back out.

    While the source cited is allegedly ‘close to the deal’, the veracity of their claims and their anonymity remains very much in question.

    So, could there be a kernel of truth in the claim? Possibly. The fact Marriott beat out Anbang has led to a ‘transaction review’ from the Chinese which is delaying the closure of the deal. While frustrating, the review is unlikely to stop the deal closing. But as with all merger deals, the longer the closure takes, the more the negative voices grow louder. Seeds of doubt about how good a deal has been agreed will begin to grow in the minds of Marriott executives.

    Secondly – and it’s been a talking point since the deal was first announced – the uncertainty in combining the two groups’ reward programmes is proving more of an obstacle than first hoped. Granted, this will be the key in ensuring Marriott have got the best deal for the $12 billion spent. But there’s no reason to suggest such difficulties will lead to a breakdown of the deal.

    And, in truth, small hurdles that sour the deal in the short term and could be used by twitchy Marriott executives as justification for pulling out of the deal are unlikely to derail this ‘megamerger’ in the long term – executives on both sides should rest easy that anonymous sources will have to do a lot more to do so.

    Daniel Fountain / 01.09.2016

    Editor, Hotel Designs

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