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

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

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

By Mike Stone

(Reuters) – China has extended its review of Marriott International Inc’s acquisition of Starwood Hotels & Resorts Worldwide Inc 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, 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.

MOFCOM has only ever blocked two deals of the 1,473 deals it has reviewed since its anti-monopoly law came into force in 2008 but it has asked for remedies in 26 cases, including InBev, according to law firm Norton Rose Fulbright.

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

The shareholders of both companies approved the deal in April.

A Chinese company, Anbang Insurance Group Co, had made a bid for Starwood, but abandoned its pursuit of the hotel operator in April after a bidding war that resulted in Marriott increasing its cash-and-stock bid for Starwood by $1 billion. The deal is currently valued at about $13.4 billion.

Anbang had offered $14 billion in cash but an acquisition by the Chinese firm would probably have faced scrutiny by the Committee on Foreign Investment in the United States, an interagency panel that reviews deals to ensure they do not harm national security.

(Reporting by Mike Stone and New York and Rachit Vats in Bengaluru; Editing by Kirti Pandey and Sandra Maler)

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