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In addition to having to persuade its shareholders to approve its newly revised merger agreement with Marriott International, Starwood Hotel & Resorts has an added responsibility: to assure its approximately 188,000 employees around the world that Marriott’s pending acquisition won’t equate to job losses, and to rally their spirits for an upcoming, and possibly painful integration.
On March 31, shortly after news broke that Anbang Insurance Group and its consortium had abandoned their pursuit to acquire Starwood, Starwood CEO Thomas B. Mangas sent a note to all Starwood associates in an attempt to assure them that proceeding with Marriott was a good thing, and empathizing with them about the “roller coaster ride” they’ve experienced in the last few weeks throughout this bidding war between Marriott and Anbang.
On April 1, the company’s leadership sent another note to Starwood associates that echoed Mangas’ sentiments, and provided additional details as to why the merger with Marriott will be beneficial and why it was a good thing that Anbang stepped in. For one, the value of the company increased, and Marriott is committed more than ever to buying the company because of its loyalty program, brands, and talent.
The list of bullet points also attempted to assuage any anxiety or fears its employees may have regarding their job security. It also noted that the company does not know why the Anbang consortium decided to remove itself from the bidding process. Starwood leadership also made it clear that it understood how difficult the last few weeks, in particular, have been for its employees, and that it does not underestimate the kind of impact a merger with Marriott will have:
“A merger of this magnitude has real consequences for many of our people and we recognize that. We’ve been dealt a tough hand over the last year, but through it all we have showed resilience, drive and a huge desire to win.”
Anbang’s 11th hour entry, while adding a tremendous amount of anxiety, no doubt, for Starwood’s employees, also gave them some sense of hope. If Anbang had succeeded, the chances of Starwood employees losing their jobs were far less than if Marriott proved victorious.
With the exception of Starwood’s top five executives, there are no golden parachutes awaiting the majority of Starwood’s employees who may or may not lose their jobs as part of the $250 million in synergies tied to Marriott’s acquisition.
You can read the note in its entirety below:
● Net-net, this process, arduous as it was, was a positive – increasing the value of our company by 15.4%. As you witnessed firsthand in the press, Marriott is even more excited about the potential of our combined companies after spending the last few months learning more about Starwood and our strengths during the integration planning process.
● Arne Sorenson and the Marriott team have been effusive in their praise for what they see as Starwood’s advantages – our culture of brands, the immense loyalty of our high value SPG members, our global footprint and the worldwide infrastructure we have developed over time as a truly global company.
● As we said when we first announced the merger, Marriott was attracted to Starwood in large part because of the strength of our people. Marriott will need to retain Starwood talent to respond to the volume, scale and complexities of a much larger business, and will also rely on Starwood talent for some time post close to successfully integrate our companies.
● Together with Marriott, we continue to make progress on the process for talent selection and retention as well as identifying transitional/lift and shift roles.
● As of now we do not anticipate any changes to the timeline around the talent process we laid last month. We will push hard to ensure that the process remains on track, understanding that uncertainty will continue to prevail until our people have a clear sense of their future opportunities with the new company and timelines.
● During the entire process over the last few weeks our Board remained committed to the Marriott merger and the merits of our strategic combination which you know well — all-important scale, much greater presence in the upscale segment, a long runway to grow, the power of our combined best-in-class loyalty programs, and unrivaled choice for our guests and customers with 30 brands across all key market segments.
● No company handles change as well as Starwood and there is no team as resilient. Over the next few months as an independent company the focus of our leaders is clear: to win in the marketplace and to advocate for our people and the special capabilities we’ve built together.
● We realize this was a tough time of ups and downs and, depending on where you sit in the organization, each option had real professional and personal implications. This added one more layer of uncertainty on top of the uncertainty we’ve been living with for some time. A merger of this magnitude has real consequences for many of our people and we recognize that. We’ve been dealt a tough hand over the last year, but through it all we have showed resilience, drive and a huge desire to win.
● Our leadership is needed now more than ever as we bring our associates through this period of great change. The best way we ensure the continued success of our brands, programs like SPG and, most importantly, our people is for us to delight our guests every day, exceed our owner’s expectations, grow our RevPAR faster than our peers, and develop our talent for the future better than anyone else.
● Our integration work continued over the last couple of weeks and will really amp up after the shareholder vote next week. Our integration teams have been working tirelessly with their counterparts at Marriott and there is a lot of work ahead as we focus first and foremost on critical Day One must-dos.
● Needless to say, we all have a lot of questions about the market considerations that led the Anbang Consortium to withdraw its bid. However, there’s not a lot of value in speculating at this point.
Chronology of Marriott-Starwood-Anbang:
- Monday, March 14: Starwood Gets Takeover Bid by Consortium Led by Chinese Firm Anbang
- Monday, March 14: New Starwood Takeover Bid: The Players Behind the $13 Billion Offer
- Tuesday, March 15: Starwood Rival Takeover Bid: What It Means for Brands, Executives and Shareholders
- Friday, March 18: Starwood Accepts Anbang’s Takeover Bid, Marriott Plans a Counter-Offer
- Friday, March 18: Will Marriott Be Able to Top Anbang’s Offer for Starwood?
- Monday, March 21: Starwood Accepts Marriott’s Counter-Offer Worth $13.6 Billion
- Monday, March 21: Marriott Investor Call: This Is What We Have In Store for Starwood
- Wednesday, March 23: This Is How Marriott Could Lose Starwood to Anbang’s Investor Group
- Friday, March 25: What Marriott Is Telling Its Shareholders About Starwood the Second Time Around
- Friday, March 25: The Inside Story of Anbang’s Long Pursuit to Acquire Starwood
- Monday, March 28: Starwood Executives’ Golden Parachutes Got More Golden With New Marriott Offer
- Monday, March 28: Starwood Takeover: Anbang Raises Offer to Upset Marriott Bid
- Monday, March 28: What Starwood’s CEO Is Telling Employees About the Sale Process
- Tuesday, March 29: This Is What Marriott Has to Do to Keep Starwood from Anbang
- Thursday, March 31: Starwood Hotels Bidder Anbang Walks Away, Leaves Door Open for Marriott
- Friday, April 1: What Starwood’s CEO Is Telling Employees About Anbang Walking Away
- Friday, April 1: Marriott CEO: Most Important Thing for Us Is the Loyalty Program
- Friday, April 1: Marriott-Starwood Investor Call: Anbang’s Deal Was ‘Very Real’
- Friday, April 1: The Inside Story of Anbang’s Final, Failed Attempt to Acquire Starwood