Friday, March 18, 2016

Chinese to Own Starwood?

According to http://www.breakingtravelnews.com, the Starwood Hotel chain has rejected a takeover bid by Marriott in favour of a higher offer from Chinese insurance giant Anbang. This is good news for Starwood shareholders, perhaps not so much for travellers.

Starwood has more than 1,200 hotel properties worldwide, including brands such as Sheraton, W, and Meridien. It appears likely that a bidding war will develop for Starwood, which could raise the price further.

Takeovers often lead to consolidation or spin-offs, as the new owners try to squeeze more profit from existing assets. The more the acquiring company pays, the more they will need to wring from these assets. It sounds to me as if this is all going to lead to higher prices for customers, except perhaps in very competitive markets.

Chinese companies are gobbling up assets around the world, and while I have no reason to believe they are any more grasping than other major corporations, it is an interesting development.

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