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Marriott to buy Starwood to create world's biggest hotel chain

By Ankit Ajmera and Mike Stone

(Reuters) - Marriott International Inc (MAR.O) will buy Starwood Hotels & Resorts Worldwide Inc (HOT.N) for $12.2 billion to create the world's largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.

The combined company will have over 5,500 hotels with 1.1 million rooms worldwide, giving Marriott a greater presence in markets such as Europe, Latin America and Asia and allowing it to better compete with apartment-sharing startups such as Airbnb.

Airbnb is expected to eat into hotels' business as it signs up more and more homeowners, analysts warn.

About three-quarters of Marriott's rooms are in the United States. About half of Starwood's rooms are outside North America, but accounted for nearly two-thirds of its revenue in 2014.

"Our success has been driven by our ability to anticipate market shifts and meet those changes head on," Marriott Chief Executive Arne Sorenson, who will lead the combined company, said on a conference call on Monday.

The deal, one of the biggest since Blackstone Group LP bought Hilton Worldwide Holdings Inc (HLT.N) for $26 billion in 2007, could spark industry consolidation.

Starwood shares fell as much as 8 percent to $68.96 on Monday, way below the offer...