EXHIBIT 3
MARRIOTT INTERNATIONAL TO ACQUIRE
RENAISSANCE HOTEL GROUP
ACQUISITION MORE THAN DOUBLES INTERNATIONAL PRESENCE
MAJOR ASIAN ALLIANCE ESTABLISHED
WASHINGTON, DC -- February 18, 1997-- Marriott International, Inc. (MAR/NYSE)
and Renaissance Hotel Group, N.V. (RHG/NYSE) today announced an executed
agreement for Marriott to acquire Renaissance Hotel Group, a premier operator
and franchisor of 150 hotels (46,425 rooms) worldwide in 38 countries. Combined,
Marriott International and Renaissance Hotel Group operate or franchise more
than 1,300 hotels worldwide (273,000 rooms) across ten brands, including nearly
200 hotels (55,000 rooms) outside of the United States. By year-end 1997,
Marriott's worldwide lodging system is expected to exceed 300,000 hotel rooms.
Renaissance Hotel Group shareholders will receive $30 per share in cash. The
total acquisition cost is approximately $1 billion, including transaction costs
and existing net debt of Renaissance Hotel Group. Shareholders of Renaissance
Hotel Group, owning more than 54 percent of the voting stock, have agreed to the
terms of the acquisition. Marriott expects to commence a tender offer for all
outstanding Renaissance Hotel Group shares within five business days.
Renaissance Hotel Group operates or franchises its hotels and resorts under
three established brand names: Renaissance is a quality international brand for
affluent business and leisure travelers; New World is a quality hotel brand in
Asia and the Pacific region; and, Ramada International is a mid-priced lodging
brand outside of the United States and Canada. Renaissance Hotel Group also
master licenses the Ramada name in the United States and Canada to others under
long-term agreements. The company does not have any significant owned real
estate.
J.W. Marriott, Jr., Chairman of the Board and Chief Executive Officer of
Marriott International, and Dr. Henry K.S. Cheng, Chairman of Renaissance Hotel
Group and Managing Director of New World Development Co., Ltd., jointly
announced the agreement in Los Angeles, California.
"This acquisition provides a dramatic increase in rooms and market position for
Marriott International," said Mr. Marriott. "With the addition of these three
outstanding brands to our portfolio, we immediately will reach customers in 40
new markets including Russia, China, Japan, India, Italy and Turkey, and more
than double our presence outside of the United States."
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MARRIOTT AND RENAISSANCE
Mr. Marriott added, "The acquisition also creates considerable growth
opportunities for Marriott. Specifically:
. In the Asia/Pacific region, the New World brand will add new
locations in rapidly growing markets and provide infrastructure to
support growth.
. In addition to international opportunities, we will expand the
Renaissance brand in the United States, broadening our presence in the
quality tier of the full-service hotel market. We expect to achieve
exceptional results as we aggressively leverage our operating and
marketing skills across a growing number of lodging products. The
Renaissance affiliation with Marriott is expected to yield double-
digit revenue per available room growth for U.S. Renaissance hotels.
. With the Ramada International brand, we will increase our distribution
of moderate priced lodging products to 22 countries.
Each of these brands will provide additional development opportunities for
owners and franchisees."
New World Development Co., Ltd., a major Hong Kong-based real estate development
company, is the principal owner of Renaissance Hotel Group. New World's
substantial real estate and commercial interests are located throughout Asia,
particularly in the People's Republic of China. In addition to its Renaissance
stock holdings, New World or its affiliates control 83 hotels operated by
Renaissance.
"New World Development and Marriott will be important strategic partners in
future hotel expansion. I have tremendous respect for Dr. Cheng and have
invited him to join Marriott International's Board of Directors. His knowledge
and perspective will be valuable additions to our company," Mr. Marriott said.
"I am delighted to join Bill Marriott in announcing this transaction. We share
similar corporate cultures and complement each other geographically and
operationally. At New World, we are confident that our alliance with Marriott
will enhance substantially the value of our current hotel holdings, and provide
even more exciting hotel development opportunities going forward," said Dr.
Cheng.
On a combined basis, Marriott and Renaissance Hotel Group already have over 350
hotels with 50,000 rooms in their development pipelines, to open over the next
three years. Approximately 20,000 of these hotel rooms will be outside of the
United States.
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MARRIOTT AND RENAISSANCE
Marriott International's acquisition of Renaissance Hotel Group is expected to
be completed by the second quarter of 1997. Marriott estimates that the
acquisition will increase its EBITDA (earnings before interest expense, income
taxes, depreciation and amortization) by $75 to $85 million in the first 12
months. Marriott's 1997 fiscal year earnings are expected to be reduced by 10
to 14 cents per share, primarily due to intangibles amortization. Strong growth
in future years is expected through aggressive hotel expansion across each of
the acquired brands, integration of Renaissance into Marriott's marketing,
reservations, operating and administrative systems, and other cost savings.
After a transition period, Marriott expects to achieve annual cost savings of at
least $15 to $20 million. Marriott International reported net income of $306
million ($2.24 per share) on sales of $10.2 billion for its fiscal year ended
January 3, 1997
MARRIOTT INTERNATIONAL INC. is the world's leading hospitality company, with
approximately 4,700 operating units in the United States and 29 other countries.
Major businesses include hotels operated and franchised under the Marriott,
Ritz-Carlton, Courtyard, Fairfield, Residence Inn, TownePlace Suites and
Marriott Executive Residences brands; vacation ownership resorts; food service
and facilities management for clients in business, education, and health care;
senior living communities and services; and food service distribution. The
company has nearly 200,000 employees and is headquartered in Washington, D.C.
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Marriott International Media Contacts: Tom Marder or Nick Hill at (301) 380-
2553.
Note: This press release contains "forward-looking statements" within the
meaning of federal securities law. These forward-looking statements include,
among others, statements concerning the company's outlook for 1997 and beyond;
the number of new hotel rooms expected to be added; business strategies and
their anticipated results; cost savings expectations; and similar statements
concerning anticipated future events and expectations that are not historical
facts. The forward-looking statements in this press release are subject to
numerous risks and uncertainties which could cause actual results to differ
materially from those expressed in or implied by those statements.