EU Clears Marriott-Starwood Deal, Says Deal Won't Affect Healthy Competition In Europe

Manikandan Raman
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The European Commission has cleared Marriott International Inc (NASDAQ: MAR)'s $13.6 billion acquisition of Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT), saying that the deal "would not adversely affect competition in Europe," according to a recent press release.

"This is an important merger for the hotel industry and its customers. Our investigation confirmed that the hotel sector will remain competitive for customers in Europe following the merger, so I am pleased that the Commission was able to clear the transaction quickly," Commissioner for Competition Margaret Vestager said.

At global level, more than 4,500 hotels in 85 countries operate under Marriott brand(s) and about 1,300 hotels in nearly 100 countries under Starwood.

"The Commission assessed the impact of the proposed acquisition on competition in Europe in the markets for hotel accommodation services and hotel management and hotel franchising services," the report read.

Related Link: 10 Rules For Success From The Man Who Founded Hilton Hotels

In hotel accommodation services, the Commission concluded that the merged entity will face strong competition from chain hotels and independent hotels in five cities, namely Barcelona, Milan, Venice, Vienna and Warsaw, where the combined presence of Marriott and Starwood is already strongest.

For hotel management and hotel franchising services, the Commission found that the combined firm would face effective competition in Europe from a number of competitors, including Accor, Hyatt Hotels Corporation (NYSE: H), Hilton Worldwide Holdings Inc (NYSE: HLT) and InterContinental Hotels Group PLC (ADR) (NYSE: IHG).

At the time of writing, shares of Marriott were down 3.66 percent to $61.57 and Starwood had dropped 2.52 percent to $70.01.

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