China extends Marriott-Starwood deal review by up to 60 days

Tue Aug 9, 2016 1:52am EDT
 
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By Mike Stone and Michelle Price

(Reuters) - China has extended its review of Marriott International Inc's (MAR.O: Quote) acquisition of Starwood Hotels & Resorts Worldwide Inc HOT.N by up to 60 days, the companies said on Monday.

China's Ministry of Commerce (MOFCOM) review is the only remaining merger clearance for the deal, which is expected to create the largest hotel group in the world with a combined enterprise value of $36 billion and 1.1 million hotel rooms.

Hilton Worldwide Holdings (HLT.N: Quote), which would be No.2 behind the combined group, has 775,000 rooms.

Marriott and Starwood did not say why MOFCOM needed more time and said their planned merger did not create any anti-competitive issues in China.

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 shows.

Marriott's deal to buy Starwood, the operator of Sheraton and Westin hotels, has been cleared by antitrust authorities in more than 40 countries and territories including the United States, the European Union and Canada.

The shareholders of both companies approved the deal in April.

MOFCOM has developed a reputation as a tough deals regulator, but it has only 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.   Continued...

 
Signage for the New York Marriott Marquis is seen in Manhattan, New York, November 16, 2015. REUTERS/Andrew Kelly