Marriott International Completes Spinoff And Merger

Marriott International, Inc. (MAR / NYSE) today reported that it has completed its previously announced spinoff and merger transactions.

In these transactions, Marriott International spun off to its stockholders, on a tax-free basis, a new company comprised of its lodging, senior living services, and distribution services businesses. This new company has adopted the Marriott International, Inc. name. Immediately following the spinoff, Marriott`s food service and facilities management business (Marriott Management Services) was merged with the North American operations of Sodexho Alliance. The merged company has been renamed Sodexho Marriott Services, Inc., and will remain headquartered in the Washington, D.C. area.

J.W. Marriott, Jr., chairman and chief executive officer of the “old” Marriott International, Inc., and William J. Shaw, its president and chief operating officer, assumed the same positions with the new Marriott International. Mr. Shaw also will serve as chairman of the board of Sodexho Marriott Services, Inc. Charles D. O`Dell, previously president of Marriott Management Services, has been named president and chief executive officer of Sodexho Marriott Services. Michel Landel, formerly president and chief executive officer of Sodexho North America, is now executive vice president of Sodexho Marriott Services. These two new companies are poised for growth. They have much in common that will help deliver enhanced value to stockholders, including strong positions of leadership in their respective industries, and dedicated workforces committed to providing exceptional customer service. The new Marriott International has substantial investment capacity, which will enable us to aggressively pursue growth opportunities around the world,” Mr. Marriott added.


“Marriott will continue to execute its global growth strategy by expanding distribution of our 10 hotel brands, as well as developing new vacation club resorts,” explained Mr. Shaw. “We expect to add more than 140,000 rooms to the Marriott lodging system over the next five years (1998 - 2002) through management contracts, franchise agreements, selective company development, and acquisitions,” he said, “as well as double the cumulative number of timeshare intervals sold by our vacation club business.” According to Mr. Shaw, new Marriott International also will take advantage of opportunities in the rapidly growing market for senior living services over the next five years, by opening more than 200 assisted living and full-service communities, while Marriott Distribution Services expects to gain market share in the limited line food service distribution business.

Mr. O`Dell said, “Today marks the beginning of an exciting period, with exceptional opportunities for Sodexho Marriott Services. Our people are moving forward with a focused strategy to expand our leadership position in outsourced services.” Mr. O`Dell continued, “The North American food and facilities management service industry is a $157 billion market, of which only 17 percent is contracted to management providers. As the industry leader, Sodexho Marriott Services is well-positioned to meet the needs of the expanding marketplace. “In addition,” Mr. O`Dell continued, “we expect to grow at above-average rates, and to capture a major share of new business as more organizations understand the cost savings and performance gains made through outsourcing.”

ADVERTISEMENT

As a result of the spinoff and merger transactions, a stockholder of record as of March 27, 1998, with 100 shares of “old” Marriott International common stock, for example, will own the following: 100 shares of Marriott International, Inc. common stock; 100 shares of Marriott International, Inc. Class A common stock; and 25 shares of Sodexho Marriott Services, Inc. common stock (after giving effect to a one-for-four reverse stock split). As consideration for the merger, Sodexho Alliance received common shares of Sodexho Marriott Services representing about a 49 percent ownership interest in the merged company.

In connection with the spinoff and merger transactions, Marriott International and its wholly-owned subsidiary RHG Finance Corporation (“RHG Finance”) completed the previously announced cash tender offers and consent solicitations for Marriott International, Inc.`s outstanding Series A through D Senior Notes (the “Notes”) and RHG Finance`s outstanding Guaranteed Notes. The offers to purchase, announced on February 25, 1998, expired at 9:00 a.m., New York City time, today. All Notes and Guaranteed Notes validly tendered in the offers have been accepted. The amount tendered and accepted represents approximately 99 percent of the total Notes and Guaranteed Notes outstanding.

Payment of the tender offer price, the consent payment (if applicable), and accrued and unpaid interest will be made on April 1, 1998. The description, outstanding principal amount prior to the offers to purchase, and the amount tendered and accepted for purchase for each series of Notes and for the Guaranteed Notes are as follows:


Security description and Outstanding principal Amount tendered
CUSIP number amount prior to offers and accepted for
purchase:
* 6.750% Series A Senior Notes Due
* 12/15/03, 571900AA7 $150,000,000 $147,744,000
* 7.875% Series B Senior Notes Due
* 04/15/05, 571900AB5 $200,000,000 $199,021,000
* 7.125% Series C Senior Notes Due
* 06/01/07, 571900AC3 $150,000,000 $147,419,000
6.750% Series D Senior Notes
* Due 12/01/09, 571900AD1 $100,000,000 $99,344,000
* RHG Finance 8.875%
* Guaranteed Notes Due
* 10/01/05, 749928AA5 $120,000,000 $116,500,000

“Regular way” trading of both classes of common stock of new Marriott International and the common stock of Sodexho Marriott Services will begin on the New York Stock Exchange on Monday, March 30, 1998, under the following trading symbols:

——-