The largest hotel company in the world is adding to its growing timeshare business. Marriott Vacations Worldwide is buying timeshare company ILG in a cash-and-stock acquisition worth $4.7 billion. The purchase is expected to result in $75 million in annual savings within two years, and will allow Marriott Vacations to expand in Mexico and other leisure destinations.
The deal is expected to close in the second half of the year, following approval from ILG and Marriott Vacations shareholders. Once closed, the combined company will own licenses for seven upscale timeshare brands. These include Marriott Vacation Club, the Ritz-Carlton Destination Club and the Sheraton Vacation Club.
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The acquisition of ILG could have taken place to allow Marriott to better compete against Hilton Grand Vacations and other big names in the vacation-ownership space. Once the deal closes, Marriott will nearly double its portfolio of vacation ownership properties. ILG currently has 43 vacation ownership properties and roughly 250,000 owners, and combined both companies will command 108 properties and more than 650,000 owners.
Furthermore, both entities are successful in their own right. In 2017, Marriott Vacations Worldwide reported revenue of $1.4 billion, while ILG reported revenue of $1.45 billion. The combined company will also retain exclusive access to the Marriott International and Hyatt Hotels Corporation loyalty programs for vacation ownership.
“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,” Craig Nash, CEO of ILG, said in a statement.