Summary
Marriott International, Inc. (MAR) filed an 8-K on November 21, 2011, to report the completion of a significant corporate action: the spin-off of its timeshare operations and development business into a new, independent, publicly traded company, Marriott Vacations Worldwide Corporation (MVW), under the symbol "VAC". This transaction was executed via a special tax-free dividend distribution to Marriott shareholders, who received one share of MVW for every ten shares of Marriott common stock held as of November 10, 2011. Fractional shares were to be sold with cash proceeds distributed to shareholders. Following the spin-off, Marriott no longer beneficially owns any shares of MVW, and MVW's financial results will not be consolidated into Marriott's future reporting. However, due to ongoing significant involvement through various agreements, MVW's historical financial results prior to the spin-off will remain part of Marriott's continuing operations.
Key Highlights
- 1Completion of the spin-off of Marriott's timeshare business (Marriott Vacations Worldwide Corporation - MVW) as a separate public entity.
- 2The spin-off was structured as a special tax-free dividend to Marriott shareholders.
- 3Shareholders received 1 share of MVW for every 10 shares of Marriott common stock held.
- 4MVW is now an independent company listed on the NYSE under the ticker symbol "VAC".
- 5Marriott will not consolidate MVW's financial results going forward, marking a clear separation of operations.
- 6Extensive agreements are in place to govern the post-spin-off relationship, including licensing of Marriott and Ritz-Carlton brands, employee matters, and tax sharing.
- 7A non-competition agreement is in place, preventing Marriott from entering the timeshare business and MVW from entering the hotel business.