Cendant Corporation`s Hotel Group and Marriott International Inc. announced the signing of a non-binding letter of intent for Cendant to purchase Ramada International Hotels & Resorts…
Cendant Corporation`s Hotel Group and Marriott International Inc. announced the signing of a non-binding letter of intent for Cendant to purchase Ramada International Hotels & Resorts, primarily a franchised brand of 204 hotels representing 27,728 rooms in 26 countries and territories.
Pending approval by regulatory authorities and final negotiation of terms, the signing of a sales agreement and closing on the deal are expected to occur in the next few months. Financial terms and transition plans were not disclosed. Both Cendant Corporation and Marriott International do not expect that the financial impact of the transaction will be material.
This transaction would complete the acquisition of all worldwide trademark rights for the RamadaO brand by Cendant`s Hotel Group Inc., which earlier this year acquired the trademark rights for the United States, where it franchises 819 Ramada properties representing 94,128 rooms. Cendant Hotel Group also currently licenses Ramada rights in Canada, where it franchises 71 properties representing 7,571 rooms.
Ramada International Hotels & Resorts primarily franchises hotels under the Ramada Plaza, Ramada Hotels, Ramada Resorts and Ramada Encore brands in the United Kingdom, Europe, Middle East, Africa, the Caribbean, Central America, South America, the Asia-Pacific region, Australia, Mexico and South America.
Steven A. Rudnitsky, Cendant Hotel Group chairman and chief executive officer, said the transaction would unite the Ramada brand as a worldwide entity under a single company and further demonstrate Cendant Hotel Group`s commitment to the brand, which he said is about to undergo a major upgrading and repositioning throughout the United States and Canada.
When completed, this purchase of Ramada International will extend our control of the brand throughout the world and integrate two systems currently led separately by Cendant and Marriott, he said. Both domestic and international franchisees would benefit from sharing of best practices while retaining the unique cultural approaches to doing business in each respective country.
Marriott acquired the rights to Ramada through a larger acquisition in 1997. Following the acquisition, Marriott continued to license the Ramada name in the United States to Cendant Hotel Group under existing long-term agreements. In March 2002, the two companies formed a joint venture called Two Flags that licensed the trademarks for Ramada and Days Inn in the United States. Cendant Hotel Group exercised its option to redeem Marriott`s interest in the Two Flags joint venture in April.
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