On Friday, Marriott International Inc. (MAR) completed its acquisition of Starwood Hotels & Resorts Worldwide for $13 billion, which has made it the world’s largest hotel chain. The combined entity will have 30 hotel brands under its umbrella with greater than 5,800 properties and more than one million hotel rooms. It will have presence in more than 110 countries. This would also help Marriott go past InterContinental Hotels Group’s (IHG) 766,000 rooms and 773,000 rooms of Hilton brand. (For more, see also: Say Goodbye to HOT.)

According to the terms of the deal, shareholders of Starwood would receive $21 per share in cash and 0.80 shares of Marriott for each share they held of Starwood.

Arne Sorenson, Marriott CEO, told The Associated Press on Thursday, “We've got an ability to offer just that much more choice. A choice in locations, a choice in the kind of hotel, a choice in the amount a customer needs to spend.” Sorenson also highlighted that one of the primary motives to acquire Starwood was its loyalty program (Starwood Preferred Guest), which he referred to as a “central, strategic rationale for the transaction.”

Referring to the program, he mentioned that the program members generally have higher income and are more loyal toward the brand. Also, the loyalty program of Marriott will be now linked to the Starwood’s loyalty program. Sorenson also said, “We believe that Marriott now has the world's best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs, providing an unparalleled guest experience.”

Marriott expects that the deal will be create cost synergies to the tune of $200 million by the end of the second year. Sorenson said, “The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace. This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders.” (For more, see: Marriott's Merger With Starwood Finally Clears.)

History of the Acquisition

Starwood had indicated in April 2015 that it was willing to get acquired after it faced challenges to grow as fast as other hotel chains, especially in “limited service hotels” space. In November 2015, Marriott had shown its interest in buying Starwood, which ended up in a bidding war against China-based Anbang Insurance Group early this year who was offering $14 billion. Later, the doors for Marriott were opened after the Chinese company withdrew its offer.

The withdrawal of the Chinese company had shocked market participants, as they were not able to figure out the reason for such a step. During the acquisition process, Marriott and Starwood also faced backlashes from hotel owners in Chicago who had filed a lawsuit against them. The owners alleged that the merger will ruin their business.