Anbang drops bid to buy Starwood, clearing way for Marriott

This Wednesday, March 23, 2016, photo, shows a sign at the Marriott Hotel in Richmond, Va. (AP Photo/Steve Helber)

(AP) — Anbang says it is dropping its $15 billion offer to acquire Starwood Hotels, citing various market considerations and ending a bidding war for the parent of St. Regis and Sheraton resorts.

The China-based insurance company, which was leading a consortium of potential investors, said that it won’t proceed further, an abrupt announcement that sent shares of Starwood down 4 percent in late trading Thursday.

Starwood Hotels & Resorts Worldwide Inc., based in Stamford, Connecticut, said its board continues to support its existing deal with Marriott, which initially offered $12.2 billion for Starwood in November. That has since grown to more than $14 billion.

Under the existing agreement, Starwood shareholders will get $21 cash and 0.80 of a Marriott Class A share for each Starwood share held. Starwood shareholders will own about 34 percent of the combined company, which, with 30 brands, would be the world’s largest hotel chain.

Marriott International Inc. reaffirmed that its offer creates significant economies of scale and provides shareholders a better deal over the long term. The Bethesda, Maryland, company owns brands including the Ritz-Carlton and Renaissance Hotels.

Starwood shareholders are scheduled to vote on the merger April 8.

In after-hours trading, Starwood shares fell 4.4 percent to $79.75. Marriott shares slid 5 percent to $67.64.

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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