The fourth round of the bidding war that emerged between Marriott International and an investor group led by Anbang Insurance Group over Starwood Hotels & Resorts seems to have ended suddenly when Anbang decided to back out of a new deal with Starwood due to “market considerations.”

Needless to say, the tumultuous bidding process that unfurled since March 10 has been filled with a lot of drama — the kind of drama not usually seen in either the travel industry or many modern-day mergers and acquisitions anywhere. For Starwood employees, it’s been an especially confusing time and that’s why executives are communicating with employees about what’s happening, and filing those letters with the U.S. Securities and Exchange Commission.

The CEO of Marriott wrote letters to both Starwood and Marriott employees last November, while Starwood’s then-CEO Adam Aron wrote to hotel owners as well.

Last week, on March 28, after Anbang made yet another unsolicited and non-binding all-cash offer for Starwood, Starwood CEO Thomas B. Mangas wrote to his employees, describing the process as “a wild ride” and saying, “We recognize we’re now in what feels like triple overtime.”

Yesterday evening on March 31, Mangas wrote the following to all Starwood employees:

Dear Associates:

There is no question that the last few weeks have felt like a rollercoaster ride for our company and our people. Like any ride, it could not go on forever, and I’d like to share with you that the Consortium led by Anbang just informed us that they have withdrawn their bid for Starwood. Many of you have told me that this journey has been both exciting and tiresome, and I agree, which is why I am pleased that we have reached resolution and can continue our important work with Marriott to bring together these two great companies.

Although this has been a trying process, it did lead to a 15.4% increase in the value of our company, underscoring the success of Starwood and the talent of our people. I can tell you that after having a closer look at what we have to offer, Marriott is only more excited to join forces with Starwood. They greatly admire our approach to brands, the intense loyalty of our SPG members and our global footprint, infrastructure and teams. Throughout the back and forth, our Board of Directors remained committed to our merger with Marriott, and the strategic advantages of our combination which will offer our guests and customers 1.1 million rooms across 30 brands, deliver the most powerful loyalty program in the travel industry and create countless opportunities for our associates around the globe.

Our integration teams continue to work closely with their counterparts at Marriott, and we remain on track to close midyear. Next week is our shareholder vote which will be an important milestone, after which point we can really amp up our work to integrate the best of Starwood and the best of Marriott to create the world’s leading hotel company.

It is interesting times to be sure, but it is not lost on me that for some, depending on where you sit, the potential of going in another direction had different professional implications. Clearly a merger of this magnitude can take a personal toll. However, we should all feel very proud of the sought after, innovative company we have created together. Let’s continue to take great care of our guests every day and win in the marketplace, which is the very best way to ensure that Starwood’s unique take on hospitality endures.

On behalf of our Senior Leadership Team and Board of Directors I would like to thank you for your resilience, patience and hard work during this unprecedented time.

Regards,
Tom Mangas

A Rollercoaster Ride, Indeed

An important figure to note in Mangas’ letter is the fact that, thanks to Anbang’s last-minute intervention, Starwood’s merger agreement with Marriott did increase in value by 15.4 percent. Without those takeover bids from Anbang, Marriott would have been able to purchase Starwood for much less than it will have to now. So even though the 11th hour takeover attempts felt nerve wracking, at times, for all parties involved, in the end, Starwood’s shareholders — and top executives, including Mangas — definitely benefited.

At 9 a.m. on April 1, Mangas and Marriott CEO Arne Sorenson will be hosting a joint investors call to discuss the pending merger. Expected to be included in their presentation is a better understanding of the $250 million in synergies, or cost savings, that will come as a result of a combined Marriott and Starwood.

For Starwood employees, those “synergies” are synonymous, in many ways, to job losses. While Sorenson did acknowledge back in December that job cuts would start at the top for Starwood, the prospect of a Marriott and Starwood merger is no doubt still troubling for some Starwood employees, some of whom probably assumed they might be able to keep their jobs if Anbang had been able to outbid Marriott.

Chronology of Marriott-Starwood-Anbang:

Photo Credit: The Four Points Sheraton Hotel in Richmond, Va. Anbang said Thursday, March 31, 2016, it is dropping its $15 billion offer to acquire Starwood Hotels. The abrupt end of its pursuit clears the way for Marriott to close its purchase of Starwood. Steve Helber / AP Photo