Corporate M&A activity has increased dramatically in recent years. In the first nine months of 2018 alone, approximately $3.3 trillion in mergers and acquisitions were announced globally.
In keeping with this overall trend, hospitality has seen a similar surge in mega-deals and consolidations, including Marriott International's $13.3 billion acquisition of Starwood Hotels & Resorts in 2016; the $1.95 billion acquisition of La Quinta Holdings by Wyndham Hotels & Resorts earlier this year; AccorHotels' $319 million acquisition of a 50% stake in sbe Entertainment Group in October 2018; and the recent acquisition of Two Roads Hospitality by Hyatt Hotels for $405 million (with potential additional consideration of $96 million).
To be sure, economic factors - including changes to the federal tax code and rising profits stemming from a robust, post-recession economy - play a role in the increase in M&A activity. But, to an even greater extent, hospitality has been shaped by industry-specific influences that are driving companies to acquire and consolidate with others.
In their recent article for Hotel Executive, Todd Soloway, head of Pryor Cashman's Hotel + Hospitality Group, and Michelle Pham explore common issues that arise during M&A transactions involving hospitality companies and offer guidance on how parties on both sides of a deal should address the risks and liabilities.
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