Marriott International Inc. has been in talks with a French company about combining their North American food service and facilities management businesses, Marriott said yesterday.
The hospitality giant, based in Bethesda, would do little more than acknowledge contact with Sodexho Alliance S.A. International Inc. of France. It only made the announcement because of a recent report in the Financial Times of London, a Marriott spokesman said.
Marriott runs one of the nation's leading food service management operations, and Sodexho is a major French catering firm.
Out of overall revenue of $10.2 billion last year, Marriott's North American food services accounted for about $3 billion, according to analyst John J. Rohs, managing director of Schroder & Co.
Sodexho had worldwide revenue of $4.2 billion last year, Rohs said, including close to $800 million in North America.
Some kind of marriage could give Marriott an advantage in the "narrow-margined" food services business, Rohs said. "Any additional size which can lend some clout to your bargaining power is probably a benefit," he added.
Still, Rohs said he was uncertain what to expect because the companies were being so secretive about the nature of their discussions. "It's not clear whether they're talking about Marriott being a buyer or a seller or some type of joint venture partner," he said.
Marriott said in a news release that if any transaction results from the talks, it intends to preserve bondholder value.
Both companies "are interested in maximizing the value of their businesses for their stakeholders and customers," the release said. It added that neither company will make a further statement unless they reach a binding agreement.
Marriott spokesman Nick Hill declined to elaborate.
In Paris, an analyst told Bloomberg News that Sodexho has been seeking to extend its global reach -- as has Marriott.
"Marriott needs to internationalize its contract catering operations and it's a good way for Sodexho to add global clients by reaching U.S. institutions," Jean-Jacques Vironda of Societe Generale Strauss Turnbul said.
Sodexho is primarily a catering company, and also builds restaurants and provides management, budgeting and travel services.
Besides its food services, Marriott operates hotels in 52 countries and territories under the Marriott, Ritz-Carlton, Courtyard, Fairfield, Residence Inn, TownePlace Suites, Executive Residences, Renaissance, New World and Ramada International brands. Marriott stock rose $1.0625 yesterday to close at $70.125.
Pub Date: 9/19/97