Marriott Vacations Worldwide Corp. will buy Miami-based ILG Inc. for $4.7 billion, the companies announced on Monday.
The deal, a combination of cash and stock, will create the largest portfolio of luxury timeshare vacation resorts with a combined revenue of $2.9 billion and more than 100 vacation properties around the world, according to a press release.
ILG shareholders will receive $14.75 in cash and 0.165 shares of Marriott Vacations Worldwide stock for each ILG share. ILG will add more than 250,000 owners to Marriott, bringing the combined company to about 650,000 owners and more than 20,000 owner units.
If approved by shareholders of both companies, Marriott will be the exclusive licensee of Marriott Vacation Club, Grand Residences by Marriott, Ritz-Carlton Destination Club, Sheraton Vacation Club, Westin Vacation Club, St. Regis Residence Club, and Hyatt Residence Club.
The companies expect the deal to result in $75 million of annual savings within two years. Activist ILG investor FrontFour Capital advised the company to merge with Marriott Vacations last year, adding that the refusal to consider a deal would “call into question the existing board’s ability to satisfy its fiduciary duties,” Bloomberg reported.
Interval International, ILG’s leading exchange business, will continue to be based in Miami. – Katherine Kallergis