After overcoming a lengthy and tumultuous bidding war, Marriott International’s pending purchase of Starwood Hotels & Resorts has hit another snag. Bloomberg reports that hotel owners in Chicago and New York have sued Marriott and Starwood to block the purchase.
Cityfront Hotel Associates Limited Partners, which owns Sheraton Grand Chicago, and Dream Team Hotel Associates LLC, owner of The Westin New York at Times Square, sued Marriott and Starwood in New York state court, arguing that the purchase would violate exclusivity agreements that block Starwood from operating properties within a certain geographic radius of these hotels.
If the landmark purchase goes through, it will create the world’s largest hotel company. Marriott International, Inc. has more than 4,400 properties in 87 countries and territories. Marriott International reported revenues of more than $14 billion in fiscal year 2015. Starwood Hotels & Resorts Worldwide, Inc. has nearly 1,300 properties in approximately 100 countries.
As previously announced, the parties have cleared the prepurchase antitrust review in the United States and Canada and multiple other jurisdictions. Prior to the announcement of this lawsuit, the deal was on track to close mid-2016, pending remaining regulatory approvals, including those from the European Union and China, and the satisfaction of other customary closing conditions.
Marriott’s Starwood Purchase Timeline
- Starwood accepts a $12.2 billion acquisition offer from Marriott in November
- Starwood opts for a $13.2 billion bid by Anbang on March 17
- Marriott sweetens offer to $13.6 billion, which Starwood accepts
- Anbang allowed to continue negotiations, upping its offer to $14 billion
- Anbang pulls out of negotiations on March 31
- Special meeting of Starwood and Marriott stockholders approves transaction on April 8