Marriott International Inc announced Monday that it will acquire rival Starwood Hotels & Resorts Worldwide Inc in a deal valued at $12.2 billion. The acquisition will create the world’s largest hotel company that would operate or franchise more than 5,500 hotels with 1.1 million rooms in over 100 countries across the globe, the companies said, in a joint statement.

Under the terms of the deal, Starwood shareholders will receive 0.92 shares of Marriott Class A common stock and $2 in cash for each share of Starwood common stock. Marriott will pay $11.9 billion in stock and $340 million in cash for its rival.

The offer translates into $72.08 a share for Starwood, a discount of approximately 4 percent to the stock’s Friday close. Since April, when Starwood said it was exploring “strategic alternatives to increase shareholder value,” the company’s shares have fallen over 7 percent.

The deal is expected to close in mid-2016, the companies said, in the statement.

Approximately $200 million will be trimmed from the companies’ combined annual operating expenses by uniting Starwood’s brands -- which include Westin, W and St. Regis -- with Marriott's two dozen brands, including Courtyard, Ritz-Carlton and Fairfield Inn, according to the statement.

“The driving force behind this transaction is growth. 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,” Arne Sorenson, president and CEO of Marriott International, said, in the statement. “This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders.”

In pre-market trading Monday, Starwood’s shares were down 2.3 percent, while Marriott’s shares were up 1 percent.