Marriott global Inc (NASDAQ:MAR) and Starwood Hotels & Resorts

Starwood shareholders will get $2 in cash for each share as well as 0.92 Marriott Class A shares.

Starwood’s stock was down 5% to $71.50 as of 2:45 p.m. ET Monday, while Marriott shares were flat at $72.65.

Starwood shareholders will also reap an estimated $1.3 billion from the spinoff of Starwood’s timeshare business and that unit’s subsequent merger with Interval Leisure Group.

Starwood put itself on the market in April when board chairman Bruce Duncan said the company planned to explore a “full range of strategic and financial alternatives”.

Marriott said it expected one-time transaction costs of $100-million-$150-million related to the deal. The acquisition will create the world’s largest hotel company with 30 brands under its belt.

Following the news, Starwood shares plummeted 3.3% at $72.50 in pre-market trading on Monday, while Marriott shares soared 1.7% at $74.01.

“Starwood shareholders will benefit from ownership in one of the world’s most respected companies, with vast growth potential further enhanced by cost synergies”, he said.

Last month, the Chicago-headquartered Hyatt Hotels Corporation was linked with a takeover, and there was also speculation about a tie-up with InterContinental Hotels Group.

Sorenson will remain president, CEO of the merged company, and the headquarters would stay in Bethesda, Md. Kyo-ya Corp. owns the Sheraton Waikiki, Royal Hawaiian, Moana Surfrider and Princess Kaiulani hotels, which all carry Starwood brands. Marriott expects to add three Starwood members to its board, bringing the total to 14, after the deal closes in mid-2016. “The transaction combines Starwood’s leading lifestyle brands and worldwide footprint with Marriott’s strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio”, states an announcement released by Marriott. The companies said the deal will not only initiate an increase in global growth by using Marriott’s extensive relationships, but it will also help the combined company improve in areas like reservations and procurement, profitability, and franchise attractiveness.

The two companies will have 5,500 hotels around the world with 1.1 million rooms.

“We’ve become, I think, more impressed by what we can accomplish by becoming bigger”, he said.

While stock deals are generally less attractive for shareholders than getting the chance to cash out, most hoteliers – including Marriott – have delivered better returns than Starwood.