China's OK clears last hurdle for Marriott's deal to buy Starwood

September 20, 2016 9:15 AM EDT

A Marriott flag hangs at the entrance of the New York Marriott Downtown hotel in Manhattan, New York November 16, 2015. REUTERS/Andrew Kelly


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(Reuters) - Chinese antitrust regulators approved Marriott International Inc's (NASDAQ: MAR) deal to buy Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT), clearing the way for the combined company to become the world's largest hotel chain.

China's Ministry of Commerce (Mofcom) review was the only remaining merger clearance for the deal after the companies secured approvals from more than 40 countries including the United States and Canada.

The merged group would become the largest hotel operator in China with a 4.1 percent market share, followed by Homeinns Hotel & Management at 4 percent and China Lodging Group at 3.9 percent, data from research firm Euromonitor International showed last month.

China's Anbang Insurance Group Co [ANBANG.UL] abandoned its pursuit for Starwood in April after a bidding war with Marriott.

Mofcom has blocked two transactions since China's antimonopoly law came into force in 2008, compared with 1,447 unconditional clearances, according to data compiled by law firm Norton Rose Fulbright.

Shareholders of both Marriott and Starwood approved the deal in April.

The combined company will have an enterprise value of $36 billion and over 5,500 hotels with 1.1 million rooms.

The deal will give Marriott greater access in markets such as Europe and Latin America, besides helping compete with apartment-sharing startups such as Airbnb.

Marriott and Starwood expect the transaction to be completed before the market opening on Sept. 23.

Marriott's shares were up 3.4 percent at $70.68 in late morning trading on Tuesday. Starwood was up 3.2 percent at $77.47.

(Reporting by Rachit Vats in Bengaluru; Editing by Maju Samuel)



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