Story by The New York Times

Marriott International said on Monday that it had agreed to buy Starwood Hotels and Resorts Worldwide for $12.2 billion in cash and stock, creating the world’s largest hotel company.

Under the terms of the deal, Marriott will pay $72.08 a share in cash and stock for Starwood, whose brands include Westin, the W, Sheraton and St. Regis.

“The driving force behind this transaction is growth,” Arne M. Sorenson, the Marriott president and chief executive, said in a news release. “This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace.”

The deal would solve the big question mark that has been looming over Starwood for nearly a year. As its stock traded behind its peers, the company’s president and chief executive, Frits van Paasschen, resigned and was replaced by Adam Aron, a director, on an interim basis. Starwood said in April that it was working on strategic alternatives, including a potential sale.

Since then, there has been increasing speculation about which hotelier could be a buyer. In July, the InterContinental Hotels Group was reported to be in talks to acquire Starwood, but those rumors were quickly rejected by InterContinental. As recently as October, Hyatt was preparing a cash-and-stock bid for Starwood, people with knowledge of the negotiations said at the time.

The combined Marriott and Starwood company will have more than 5,500 owned or franchised hotels with 1.1 million rooms around the world, and it would have posted more than $2.7 billion in fee revenue for the 12 months ended Sept. 30.

“Our board concluded that a combination with Marriott provided the greatest long-term value for our shareholders, and the strongest and most certain path forward for our company,” said Bruce Duncan, chairman of Starwood.

The stock prices of both Marriott and Starwood declined in morning trading on Monday. The deal represents a premium of about 6 percent beyond the average of where Starwood’s stock has traded in the 20 days before Nov. 13, according to the statement. The premium was 19 percent using the same period through Oct. 26, when the recent takeover speculation began.

Of the $12.2 billion deal value, $11.9 billion will be paid with stock and the rest in cash. That means cash was used for a mere 2.8 percent of the deal, which is the seventh-lowest percentage on record for cash-and-stock deals greater than $10 billion, according to data compiled by Dealogic.

The companies said the deal would help Starwood accelerate the global growth of its brands by using Marriott’s relationships. The combined companies would have a presence in more than 100 countries. And the scale would help Marriott and Starwood improve efficiencies in areas like reservations and procurement, increasing property-level profitability and making them more attractive partners for franchisees, according to the statement.

“The announcement of this acquisition continues the consolidation trend in the travel industry,” Wouter Geerts, a travel analyst with Euromonitor International, said in an email. “It is unlikely that it stops here, and there is a possibility that Marriott will be looking to sell off some of Starwood’s brands.”

Starwood’s Sheraton is a focus of the deal, as the brand has been “performing poorly” over the last few years, Mr. Geerts said. Whether Marriott will sell Sheraton or try to turn it around remains to be seen, he said.

The deal is the second-largest in the hotel industry, after Blackstone acquired Hilton Hotels for $26 billion in 2007. The announcement comes at what could be the beginning of a wave of deals in the travel industry. On Nov. 4, Expedia said it had agreed to acquire HomeAway, adding vacation rentals to its portfolio of travel-booking sites.

The deal came after Starwood announced last month that it would spin off its time-share business, Vistana Signature Experiences, and merge it with a subsidiary of the Interval Leisure Group. Starwood shareholders are to receive $7.80 a share, or about $1.3 billion, as part of that transaction.

Marriott said the deal would be accretive to earnings in the second year after the merger closes, which the companies expect will be the middle of 2016. It also said the deal would create $200 million in annual cost savings in the second full year after closing by leveraging back-office and operational efficiencies.

Mr. Sorenson will remain president and chief executive of Marriott after the transaction closes, and the headquarters will continue to be in Bethesda, Md. Marriott’s board of directors will increase to 14, with the addition of three members from Starwood.

Lazard and Citigroup provided financial advice to Starwood, while Deutsche Bank advised Marriott. Cravath, Swaine & Moore served as legal counsel for Starwood and Gibson, Dunn & Crutcher counseled Marriott.

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