Marriott International Inc. and France's Sodexho Alliance SA said yesterday that they will combine their North American food service and management businesses, creating the biggest company of its kind in the United States.
Bethesda-based Marriott will spin off its hotel, senior housing and distribution businesses so the transaction will be tax-free. The two food-service businesses will be combined into a new company, 51 percent owned by Marriott shareholders and 49 percent by Sodexho. The transactions are expected to be completed by February.
The move allows Marriott to get out of a low-margin industry and focus on expanding its more lucrative business of managing hotels. While food service made up about 30 percent of Marriott's revenue last year, it accounted for only a sixth of operating profit.
Marriott's shares rose $2.25 yesterday to close at $73.313.
Marriott and Paris-based Sodexho said Sept. 18 that they were in talks to combine their contract-catering businesses, which supply and prepare food or manage operations such as cafeterias for businesses, health-care companies and schools.
Pub Date: 10/02/97