Marriott Corporation Split

On June 19, 1993, Marriott issued its annual proxy statement to shareholders in preparation for its annual meeting, scheduled for July 23. Contained in that several hundred page document was a plan to divide the company into two publicly held companies: Host Marriott and Marriott International. The reasoning was that there was a natural division between the two entities under current operating procedures. Marriott also considered that by investing relatively small amounts of capital, it could expand its presence in the lodging industry by purchasing distressed properties. Also, the company considered that there was some confusion and misunderstanding in

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an, president and CEO of the current company, would remain in those positions for Marriott International. Similarly, the executive vice president and president of the contract services group, William Shaw, would also remain in those positions at Marriott International. On the Host Marriott side, Richard Marriott would move to chairman of Host Marriott from executive vice president and vice chairman. The chief financial officer of the company would move over to Host Marriott's chief executive position, and the president of the Host division would become president of Host Marriott. From a shareholder point of view, the split appeared attractive because the debt-laden part of the business, the Host group, would be spun off into its own company, leaving the relatively strong Marriott International to stand on its own. In the market, this would likely have an upward pressure on the stock's price as the company would have a much-improved balance sheet due to the lack of debt. The split also made sense from a management standpoint in that the two businesses were largely independent and were already being run as such. Since the top managers were also large stockholders in the organization, they additionally had much to gain from an
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Approximate Word count = 1489
Approximate Pages = 6 (250 words per page)

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