Marriott International and Starwood Hotels & Resorts Worldwide have confirmed that the companies have signed an amendment to their definitive merger agreement that creates the world’s largest hotel company.

Under the terms of the amended merger agreement, Starwood shareholders will receive $21 in cash and 0.80 shares of Marriott International Class A common stock for each share of Starwood Hotels & Resorts Worldwide common stock.

Excluding its timeshare business, the transaction values Starwood at approximately $13.6 billion ($79.53 per share), consisting of $10 billion of Marriott International stock, based on the closing price of $73.16 on March 18th, 2016, and $3.6 billion of cash, based on approximately 170 million outstanding Starwood shares.

Starwood shareholders will own approximately 34 per cent of the combined company’s common stock after completion of the merger, based on current shares outstanding.

The revised deal follows an announcement from Starwood on Friday that it had entered talks with Chinese insurance giant Anbang about a possible deal.

Under the terms of the new Marriott deal Starwood stockholders are expected to receive separate consideration in the form of Interval Leisure Group common stock from the spin-off of the Starwood timeshare business and subsequent merger with ILG, currently valued at $5.83 per Starwood share.

Both companies continue to expect the closing of this transaction will occur well before the planned date of the Marriott-Starwood merger closing. 

The amended agreement and the ILG transaction have a combined current value of $85.36 per share of Starwood common stock.

As a result of extensive due diligence and joint integration planning, Marriott is confident it can achieve $250 million in annual cost synergies within two years after closing, up from $200 million estimated in November 2015 when announcing the original merger agreement.

This revised agreement offers superior value for Starwood’s shareholders, the ability to close quickly, and provides value creation potential that will allow both sets of shareholders to benefit from improved financial performance.

Marriott and Starwood have already obtained important regulatory consents necessary to complete the transaction, including clearing pre-merger antitrust reviews in the United States and Canada.

Arne Sorenson, president, Marriott International, said: “After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities.

“We are also more confident of achieving our updated target of $250 million of cost synergies.

“With a higher cash component in the purchase price, we have improved the transaction’s financial structure as well.

“We expect to accelerate the growth of Starwood’s brands, leveraging Marriott’s worldwide hotel development organisation and owner and franchisee relationships.

“On the top line, combined sales expertise and increased account coverage should drive additional customer loyalty and increase revenue.

“Hotel level cost savings should benefit owners and franchisees, including better efficiencies in reservations, procurement and shared services. 

“The company will have a broader global footprint and the most powerful frequent traveller programs in the industry, strengthening Marriott’s ability to serve guests wherever they travel. 

“We are also bringing together two of the most talented and experienced teams in the industry.

“Together, they will combine their innovative ideas and service commitment to deliver unforgettable guest experiences.”