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Commercial Real Estate

Starwood Reorganizing Into Hotel, Gambling Units

March 31, 1998|From Reuters

PHOENIX — Starwood Hotels & Resorts Worldwide Inc., which defeated Hilton Hotels Corp. in a takeover battle for ITT Corp., said Monday that it will reorganize into separate hotel and gambling operating groups.

The move comes after Starwood's acquisition this year of ITT, the owner of Sheraton hotels and Caesars World casinos, for $10.2 billion, excluding debt, and the purchase of Westin Hotels & Resorts for about $1.6 billion.

The reorganization includes the naming of a number of former Sheraton and Westin executives to key positions in the new hotel group.

"Today's announcement is a major step in the integration of ITT, Westin and Starwood, which now constitute the new Starwood Worldwide," said Barry Sternlicht, chairman of Starwood Hotels & Resorts Worldwide.

"The goal was to refine and maintain brand integrity while putting in place the most streamlined operating organization," he added.

Phoenix-based Starwood also said it will relocate its corporate headquarters to a New York City suburb, either in New York's Westchester County or in Connecticut's Fairfield County.

It said most of the operating and staff functions now based in New York, Boston, Atlanta, Phoenix and Seattle will be consolidated and relocated to the new corporate offices.

The company will not say how many jobs could be lost in the reorganization.

Starwood--whose brands include Sheraton, Westin, Ciga, Four Points, St. Regis and Caesars World--said the hotel group will be led by former Westin Chairman Juergen Bartels as chief executive.

The gambling operations will be led by Peter Boynton, CEO of Caesars World Inc., who also will become Caesars chairman. Boynton will be responsible for all Caesars operations, including its properties in Atlantic City, N.J., and Las Vegas. The gambling group will remain based in Las Vegas.

The hotel group will consist of operating divisions for North and Latin America, Europe, the Middle East and Africa and the Asia-Pacific region. Each operating division will be headed by a president, five of whom are from the Sheraton organization.

Bartels will have worldwide responsibility for the 650 properties and products under the Starwood umbrella.

Former Westin President Fred Kleisner will become president and chief operating officer for the Americas, Starwood said.

Osvaldo Librizzi, former ITT Sheraton president for Latin America, will hold that title for Starwood, the company said. Robert Cotter, formerly ITT Sheraton president for Europe, will lead Starwood's European hotel operations.

Although the hotel and gambling groups will be operated by separate management teams, they will share purchasing and marketing, the company said.

The stock of Starwood Worldwide is paired with that of real estate investment trust Starwood Hotels & Resorts Trust.

Their shares were unchanged at $59.56 on the New York Stock Exchange.

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