Host Marriott To Buy 38 Starwood Hotels
Host Marriott Corp. today announced a $4.04 billion deal to purchase 38 luxury and upper upscale hotels from Starwood Hotels and Resorts Inc. The move will expand Host Marriott's portfolio to 17 brands in nine countries, according to a company release. Starwood CEO Steven Heyer said the transaction would accelerate his company's transformation from a "real estate company with some hotel brands" to a "consumer lifestyle company" with a branded hotel portfolio core.
The sale consists of 25 domestic and 13 international properties, and White Plains, N.Y.-based Starwood would continue to manage the properties for up to 40 years under the agreement. The portfolio consists of properties managed under the Westin, Sheraton, W Hotels, The Luxury Collection and St. Regis brands, including the 1,746-room Sheraton New York Hotel & Towers and the 1,044-room Sheraton San Diego Hotel & Marina. The stock-and-cash transaction includes debt assumption of approximately $700 million, 133.5 million shares of Host stock distributed directly to Starwood shareholders and more than $1 billion in cash.
Bethesda, Md.-based Host said the acquisition would diversify its portfolio both in brands and in locations. The deal launches the company's expansion into Europe and strengthens its presence in such key domestic markets as Boston, New York, San Diego and Seattle, according to the release. Heyer said the revenue gained from the deal would help develop Starwood's vacation ownership properties, extended-stay properties and Aloft, the company's new midprice brand.