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Cendant Corporation
has exercised its option to redeem Marriott’s interest in the Two Flags joint venture, which owns the trademarks and licenses for
the Ramada and Days Inn lodging brands in the United States.
Marriott continues to own the trademarks and licenses for Ramada outside
of the United States; operate and franchise hotels outside of the United
States and Canada under the Ramada International brand name; and license the Ramada name in Canada to
Cendant.
Marriott acquired the rights to Ramada through a larger acquisition in 1997.
Following the acquisition, Marriott continued to license the Ramada name in
the U.S. to Cendant for use in lodging and timeshare under existing long-term agreements. In March 2002, the two companies formed a joint
venture that licensed the trademarks for Ramada and Days Inn in the U.S.
“The redemption of our joint venture interest represents Marriott’s
intention to monetize and exit from a non-core asset, the domestic Ramada
rights,” said Arne M. Sorenson, executive vice president, chief financial
officer and president – continental Europe lodging for Marriott International.
The redemption of the joint venture interest is effective April 1, 2004. Marriott
expects to receive approximately $200 million on Sept. 1, 2004, and use the
funds for its ongoing share repurchase program. Marriott said it expects to record
a pretax gain of approximately $13 million in connection with this transaction in the third quarter. |
