Rumours emerge of Marriott IHG merger

Rumours emerge of Marriott IHG merger

Talk of a possible tie-up between UK-based InterContinental Hotels and US giant Marriott emerged in the City of London yesterday.

FTSE 100-listed IHG runs more than 4,500 hotels worldwide while Marriott operates 3,700 properties.

Analysts at broker Numis, quoted in the Daily Telegraph, thought that “hotel industry consolidation is inevitable at some stage” and considered a merger between the pair to be “just one of the potential tie-ups”.

A merger between IHG and Marriott would create a dominant player in the global hotel market with over 9% of global room supply.

The broker calculated that such a deal could be worth £5.5 billion.

“The strategic rationale for a merger between InterContinental and Marriott is compelling,” said Numis. “First of all the strategic growth plans for the two businesses are remarkably similar.

“Both, for example, have had a long-standing focus on reducing hotel ownership and pursuing management and franchise contracts.

“Secondly, both companies are pursing global growth opportunities by establishing a strong presence in key gateway cities, continuing to develop in large established markets and looking to expand in emerging markets, notably China.”

Shares in IHG rose by 33p to £14.65.

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