agreed to acquire 38 hotels from
for $3.4 billion of stock and cash plus assumed debt.
Starwood, whose CEO Steven Heyer was brought from
late last year, said the sale will accelerate its transformation into a "consumer lifestyle company with a branded hotel portfolio at its core." Starwood announced plans for
a lower-priced hotel chain with boutique touches in early June.
The portfolio being transferred consists of 25 domestic and 13 international properties and a total of 18,964 rooms managed under the Westin, Sheraton, W Hotels and other brands.
Host Marriott will issue about 133.5 million shares worth about $2.3 billion plus cash in the transaction. It also expects to assume about $700 million in debt.
"We believe these assets represent one of the highest quality lodging portfolios available and they will complement our existing portfolio of outstanding hotels," Host Marriott said. "We also believe that we acquired the portfolio at an attractive price that will be accretive to both our earnings and our credit and will add to the short-term and long- term value of the company."
For Starwood, "This transaction puts a strategic stake in the ground, accelerating Starwood's transformation from a real estate company with some hotel brands to a consumer lifestyle company with a branded hotel portfolio at its core. This well-timed sale commits Starwood to an 'asset right' strategy, shifting our revenue and profit mix to place greater emphasis on successfully developing and leveraging our renowned brands," Heyer said in a release.
After the divestiture, Starwood will be "increasingly focused on driving top line growth and profitability through marketing, branding, development and, above all, providing superior experiences to our guests," the company vowed.