Marriott Vacations Worldwide to Buy ILG in Mega Timeshare Deal

The deal calls for ILG shareholders to receive $14.75 in cash and 0.165 shares of Marriott Vacations Worldwide common stock for each ILG share. The transaction is expected to close sometime during the second half of this year.

The Westin Lagunamar Ocean Resort in Cancun, Mexico

MIAMI—The former timeshare divisions of now merged hoteliers Starwood Hotels & Resorts and Marriott have decided to merge their operations in a deal valued at approximately $4.7 billion.

Marriott Vacations Worldwide Corp. of Orlando reports it has signed a definitive agreement to acquire Miami-based ILG in a cash and stock deal. The combined company will have more than 100 vacation properties worldwide and approximately 65,000 owners. Marriott International spun off its timeshare business in 2011 and Starwood sold its timeshare business Vistana to ILG in 2016 some months before Starwood was acquired by Marriott International in a deal worth about $12 billion.

Prior to today’s announcement, Reuters had reported that ILG had held merger discussions with Apollo Global Management’s Diamond Resorts International as well as with Hilton Grand Vacations Inc.

Upon the closing of the merger between Marriott Vacations and ILG, the combined company will be the global licensee of seven upscale and luxury vacation brands, including 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. It will also have exclusive access for vacation ownership to the Marriott Rewards, Starwood Preferred Guest and Ritz-Carlton Rewards loyalty programs for its six Marriott vacation ownership brands. The combined company will have rights to develop, market and sell under the Hyatt Vacation Ownership programs, including access to the nearly10 million members of the World of Hyatt loyalty platform.

The deal calls for ILG shareholders to receive $14.75 in cash and 0.165 shares of Marriott Vacations Worldwide common stock for each ILG share. The transaction is expected to close sometime during the second half of this year. The merger deal has been approved by both company’s board of directors. Upon the closing of the deal, ILG shareholders will own approximately 43% of Marriott Vacation Worldwide’s common shares on a fully diluted basis.

“This transaction will combine two of the premier global vacation ownership companies to create a more diversified company with significantly enhanced marketing potential and scale to drive sales growth and value for both MVW and ILG shareholders,” states Stephen P. Weisz, president and CEO of Marriott Vacations Worldwide.

Marriott Vacations Worldwide reports that it has received financing commitments for the merger deal from J.P. Morgan and BofA Merrill Lynch. J.P. Morgan is acting as exclusive financial advisor to Marriott Vacations Worldwide and Kirkland & Ellis LLP is serving as legal advisor. Goldman Sachs & Co. LLC and Moelis & Company LLC are serving as financial advisors to ILG and Paul Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to the firm.

Craig M. Nash, chairman, president and CEO of ILG, adds, “The strategic rationale for this transaction is clear. Combining these two highly complementary businesses will create an industry leader with enhanced scale and a broader product portfolio that will have great benefits for our members, owners and guests.”

Interval International, ILG’s leading exchange business, will maintain its headquarters in Miami where it has been based since its founding in 1976. Marriott Worldwide’s headquarters will also remain in Orlando.

Marriott Vacations Worldwide’s Weisz and its chief financial and administrative officer John Geller will continue to serve in their roles following the close of the transaction. The Marriott Vacations Worldwide board of directors will be expanded from eight to 10 members to include two current members of the ILG Board. William Shaw will remain chairman of the board.