The two companies have announced that the $12bn deal will create the world’s largest hotel company

The deal creates a more comprehensive brand portfolio. Additionally, the merged biggest hotel company will offer better choices for guests, greater opportunities for associates and add extra-value for Marriott International and Starwood shareholders.

The new company will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide, as the total influx for the two companies in 2015 was over $2.7 billion.

According to the agreement's terms, Starwood shareholders are entitled to 0.92 shares of Marriott International Class A common stock, $2.00 for each share of Starwood common stock and Starwood shareholders will own approximately 37 per cent of the combined company’s common stock after merging.

Total consideration to be paid by Marriott sums $12.2 billion. Nevertheless, Marriott forecasts to deliver at least $200 million in annual cost savings starting the second year of merging.

Arne Sorenson, president of Marriott International, declared about the historic deal:

“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.

“Today is the start of an incredible journey for our two companies.

“We expect to benefit from the best talent from both companies as we position ourselves for the future.”