Mormons family-owned Marriott International Inc. broke off from a passive edge in Starwood Hotels and Resorts Worldwide after its rival, China's insurance consortium, abandoned its nearly $14 billion bid for Sheraton and Westin hotels operator.
Anbang's withdrawal is bereft of reason, and astounded Starwood, because it was announced at the cusp of the bidding process with Marriott was not clear if it had made a counterbid in the March 26 offer of the insurance conglomerate.
Reuters quoted Fred Hu as saying: "Anbang isn't interested in protracted bidding war." Hu is the chairman of Primavera one of the two private equity firm that Anbang had the joint bid offer with Starwood.
The dropped out gives favor to Marriott's ambition for the world's largest lodging company with 5,700 hotels worldwide, and is a blow to the insurance conglomerate ambition to acquire a vast portfolio of U.S real estate assets and China's intention for wide acquisitions overseas.
Anbang started with $13.2 billion since March 21, and increased it to nearly $14 billion by a margin of five days and was expected to firm up the non-binding offer. The opportunity for a long-term return, high quality, Starwood's leading global hotel brands ignited the insurance firm's desire for ownership of Sheraton and Westin.
"Various factors in the market has led the company on its decision not to proceed further" Anbang's official statement said. The conglomerate is noted to have bowed out several small deals, but with the case of Starwood, it would have clinched the biggest investment in the U.S.
With the deal is now sealed, Marriott targets a $250 million in annual cost synergies within two years after the deal closure with Starwood.