Starwood Hotels & Resorts Worldwide Inc. has agreed to spin off and sell its timeshare unit to Interval Leisure Group Inc. in a deal valued at about $1.5 billion.
The transaction for the unit, called Vistana Signature Experiences, includes 22 timeshare resorts with more that 220,000 owners and more than 5,000 employees, according to a statement from both firms on Wednesday.
Miami-based Interval Leisure will merge its board with Vistana’s after the acquisition.
Starwood shareholders will retain a 55 percent stake in Vistana after the deal, according to the statement.
“We believe that this combination will create more value for our shareholders than a standalone path,” Adam Aron, Starwood’s interim chief executive officer, said in the statement. “Not only are the economics better, but being part of a larger organization ensures more growth opportunities for the business and our associates.”
Starwood, which owns the Sheraton and W brands, in February announced a plan to spin off its timeshare unit. In June, the firm said it would list that division as Vistana Signature Experiences Inc. on the New York Stock Exchange by the end of this year.
Starwood said in April that it was exploring strategic and financial alternatives to increase shareholder value and hired Lazard Ltd. to help in the effort.
The deal will give Interval Leisure rights to use the Sheraton and Westin brands in vacation ownership, while allowing existing timeshare owners in those resorts to continue using the to the Starwood Preferred Guest program.