European Commission approves Marriott International buy of Starwood Hotels & Resorts

Marriott Starwood merger approved

The European Commission has cleared Marriott International's acquisition of Starwood Hotels & Resorts Worldwide. The Commission found that the takeover would not adversely affect competition in Europe.

On the merger, Commissioner for Competition Margaret Vestager said: “This is an important merger for the hotel industry and its customers. Our investigation confirmed that the hotel sector will remain competitive for customers in Europe following the merger, so I am pleased that the Commission was able to clear the transaction quickly."

The Commission assessed the impact of the proposed acquisition on competition in Europe in the market for hotel accommodation services and in the markets for hotel management and hotel franchising services.

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For hotel accommodation services, the Commission investigation focused on the markets for 4- and 5-star hotels, in which both companies have a significant presence. In particular, the Commission investigated the impact of the proposed acquisition in five cities, namely Barcelona, Milan, Venice, Vienna and Warsaw, where the combined market presence of Marriott and Starwood was strongest. In each of these cities, the merged entity will continue to face effective competition from chain hotels and independent hotels, the Commission deemed.

For hotel management and hotel franchising services, the Commission investigated the impact of the proposed acquisition at the level of the European Economic Area. The Commission found that the merged entity would face effective competition in Europe from a number of competitors on all those markets, including Accor, Hyatt, Hilton and IHG.

The Commission therefore concluded that the proposed acquisition would raise no competition concerns.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

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