Hyatt Hotels Corporation is in talks with Starwood Hotels and Resorts Worldwide to acquire the latter. Though the reports have not yet been officially confirmed from both the sides, we believe an announcement would be made sooner than expected. The combination would be nothing short of awesome and the eventual merger would end up creating one of the largest lodging chains in the world. As the reports are currently coming in, Hyatt is preparing a cash and stock bid that is supposed to be announced in a few weeks. Though the rumors are strong, nothing has been officially announced by any of the two hotel chains since there are still chances discussions might fall apart.
If it happens, the benefits and advantages cannot be ignored
None of the parties have responded to the news, neither in affirmation nor in negation. Though, the news will definitely prove to be a positive decision for both the hotel chains since they have been suffering from the consequences of the recession and have witnessed a sudden downfall in profits and stock prices as well. The merger will also help both the parties deal with the sudden slowdown in expenditure in travel industry and to counter the loss caused by major currency fluctuations.
Another perk of the association would be the fact that as a unit, Hyatt Hotels Corporation and Starwood Hotels and Resorts Worldwide would be able to give a strong and worthy competition to Marriott International and Hilton Worldwide. Also, with a significant decline in the compressing costs, this move will surely prove to be beneficial in the long term.
Why Starwood Hotels and Resorts Worldwide should definitely give a go-ahead-nod
Starwood includes St. Regis, Sheraton, W and Westin brands under it. In spite of such an inclusive pallet, the company saw a decline of 19 percent in the third quarter in an intra-firm comparison from a year ago. The growth issues have been pestering for some time now. After the selling shares, Frits van Paasschen, ex-president and former chief executive, resigned. Replacement was done on an interim basis by director, Adam Aron, who has been a director since 2006. They also hired Lazard for strategic advices. An answer and a clarification to all that is expected soon. Starwood Hotels and Resorts Worldwide have already started selling the company by selling its time-share subsidiary, Vistana Signature Experiences.
Benefits to Hyatt
Acquiring Starwood Hotels and Resorts Worldwide would definitely provide Hyatt with the highly enhanced exposure they need. With new people and new funds flowing in, one can always expect better ideas. And with a market cap of $7 billion and Starwood standing at nearly double that amount, the association is surely going to be revolutionary. Though the details are not yet confirmed and reports are still awaited, one cannot help but feel good for the organization. An official disclosure and in rare case, denial, will be up soon and that’s what we hope for. It will be definitely exciting to see how the two chains will incorporate this merger in their respective hotels.
Be the first to comment on "Hyatt in talks to acquire Starwood Hotels"