Mar­riott-Star­wood deal re­view ex­tended

China Daily (Canada) - - ACROSS AMERICAS - By 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.

The Min­istry of Com­merce re­view is the only re­main­ing merger clear­ance for the deal, which is ex­pected to cre­ate the big­gest ho­tel group in the world with a com­bined en­ter­prise value of $36 bil­lion and 1.1 mil­lion rooms.

Hil­ton World­wide Hold­ings, which would be No 2 be­hind the com­bined group, has 775,000 rooms.

Mar­riott and Star­wood did not say why the min­istry 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 show.

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.

The Chi­nese min­istry has de­vel­oped a rep­u­ta­tion as a tough deals reg­u­la­tor, but it has only blocked two trans­ac­tions since China’s Anti-Mo­nop­oly Law came into force in 2008, com­pared with 1,447 un­con­di­tional clear­ances, ac­cord­ing to data com­piled by law firm Nor­ton Rose Ful­bright.

The reg­u­la­tor gen­er­ally prefers to im­pose reme­dies such as as­set di­vest­ments on trans­ac­tions it be­lieves could harm com­pe­ti­tion, tak­ing this ap­proach in 26 cases, Nor­ton Rose Ful­bright re­search shows.

Last month, the min­istry ap­proved AB InBev’s $100 bil­lion­plus takeover of ri­val brewer SABMiller Plc sub­ject to SABMiller di­vest­ing some Chi­nese as­sets. It also ex­tended InBev’s re­view to phase-three, but did not make full use of the ex­tra time.

An­bang In­sur­ance Group aban­doned its pur­suit of Star­wood in April af­ter a bid­ding war that re­sulted in Mar­riott in­creas­ing its cash-and-stock bid by $1 bil­lion.

The share­hold­ers of both com­pa­nies ap­proved the deal in April.

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