Host Marriott to buy Starwood hotels for US $4 billion

ETW Staff

The Denver property of Host Marriott

Host Marriott Corp, which owns hotels operated under the Hyatt, Hilton Westin names, agreed to buy 38 properties from Starwood Hotels and Resorts Worldwide Inc for US $4.04 billion. Host Marriott is making the acquisition as a surge in travel is boosting room rates and making properties more valuable. While Steven Heyer, chief executive, Starwood, is selling to shed its real estate assets and expand into franchising and managing hotels.

Starwood shareholders will receive US $11.18 for each share of Class B stock they own, said Host Marriott in a statement. A unit of Host Marriott will buy all the stock in Starwood's real estate investment trust. Starwood shareholders will receive US $2.45 billion in cash and stock from the transaction.

Starwood's revenue increased at an average of 17 per cent in each of the past four quarters. At the end of 2004, Starwood had a majority equity interest in 140 hotels and operated about 750 properties under names including Westin, Sheraton and St Regis. Heyer said earlier this year that Starwood needed to expand.

The hotels being acquired by Host Marriott include 28 properties in North America, six in Europe and two each in Asia and Latin America.