WHEN: Today, Friday, April 1st
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a FIRST ON CNBC interview with Marriott International CEO Arne Sorenson on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Friday, April 1st. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000506263 and http://video.cnbc.com/gallery/?video=3000506278.
All references must be sourced to CNBC.
ANDREW ROSS SORKIN: WELCOME BACK TO "SQUAWK BOX." ANBANG WALKING AWAY. THE COMPANY EXITING IT'S $14 BILLION BID TO BUY STARWOOD, A SURPRISE MOVE, CAPPING OFF WHAT WAS A THREE-WEEK BIDDING WAR AND QUITE THE SOAP OPERA. ALSO CLEARING THE WAY FOR THE OTHER BIDDER, MARRIOTT INTERNATIONAL. JOINING US RIGHT NOW IS THE WINNER OF THIS CONTEST, MARRIOTT INTERNATIONAL'S PRESIDENT AND CEO, ARNE SORENSON. WE SHOULD CONGRATULATE, BUT REALLY WE ARE SUPPOSED TO CONGRATULATE YOU IN LIKE A YEAR OR TWO WHEN IT ALL HOPEFULLY WORKS.
ARNE SORENSON: THANK YOU. BUT I'LL TAKE CONGRATULATIONS THIS MORNING. WE'RE THRILLED.
SORKIN: WELL, LET ME ASK YOU THIS, THOUGH. GIVEN THAT THEY WALKED AWAY AND GIVEN THAT THERE WERE SO MANY QUESTIONS ABOUT THAT BIDDER TO BEGIN WITH, DO YOU LOOK AND SAY WE JUST PONIED UP A BILLION DOLLARS MORE. DID WE REALLY HAVE TO.
SORENSON: WELL, OF COURSE WE WOULD LOVE TO HAVE THIS COMPANY FOR A BILLION DOLLARS LESS, THERE'S NO DOUBT ABOUT THAT. BUT THEY WERE REAL WITH THEIR FIRST BID. THEY CAME IN AT $78 A SHARE, WHICH WAS 10, 11, 12% MORE THAN THE DEAL WE HAD ON THE TABLE. FULLY FINANCED. FULLY CREDIBLE. ESSENTIALLY NO CONDITIONS. AND WE GOT A NOTICE FROM STARWOOD THAT WE WERE OUT.
BECKY QUICK: SO THAT WAS JUST THE LAST BID THAT THEY COULD –
SORENSON: IT WAS JUST THE LAST BID AND WE'VE NEVER TALKED TO ANBANG, SO WE DON'T HAVE ANY DEEP INSIGHT INTO WHAT THEY'VE DONE.
SORKIN: DO YOU WANT TO SPECULATE?
SORENSON: BUT I THINK THEY JUST DECIDED NOT TO GO FORWARD.
SORKIN: WE HAD EUNICE YOON ON FROM CHINA THIS MORNING SAYING THAT AT LEAST INSIDE THE COUNTRY, THERE'S QUESTIONS ABOUT WHETHER REGULATORS IN CHINA, NOT HERE, WERE PREPARED TO LET THEM GO FORWARD WITH A HIGHER BID.
SORENSON: YEAH, LORD KNOWS. WE CERTAINLY DON'T HAVE ANY PARTICULAR INSIGHT TO THAT. I THINK WHAT ANBANG HAS SAID IS IT GOT EXPENSIVE. AND TO BE FAIR, IT'S WORTH MORE TO US IN SOME RESPECTS BECAUSE WE'VE GOT IMMEDIATELY $250 MILLION OF CROS SYNERGIES, WHICH MAKE THE EBITDA MULTIPLE THAT WE ARE EFFECTIVELY PAYING MEANINGFULLY LOWER THAN WHAT THEY WOULD HAVE BEEN PAYING BECAUSE THEY HAD NO EXISTING BUSINESS TO BRING THE SAME KIND OF SCALE.
QUICK: WHAT DOES THAT MEAN WHEN YOU SAY CROSS SYNERGIES? DOES THAT MEAN DEPARTMENTS YOU CAN ELIMINATE ON ONE SIDE OR ANOTHER BECAUSE IT IS OVERLAPPING?
SORENSON: COST. THAT IS BASICALLY OVERHEAD COSTS. AND SO THAT DOESN'T EVEN GET TO WHAT WE CAN DO ON THE REVENUE SIDE WITH STRONGER LOYALTY PROGRAMS BY COMBINING THESE WITH A BROADER DISTRIBUTION. AND WE THINK THERE'S SORT OF TREMENDOUS UPSIDE WHICH WE WILL BE ABLE TO WORK THE NEXT FEW YEARS.
SORKIN: OK. SO NOW THAT YOU'VE WON, THE CHALLENGE IS, OF COURSE, PUTTING THIS ALL TOGETHER.
SORENSON: RIGHT.
SORKIN: WHICH CREATES ITS OWN RISK. YOU LOOK AT THE COMBINATION, YOU THINK THE HIGHEST SORT OF EXECUTION RISK IS WHAT?
SORENSON: WELL, I THINK THE MOST IMPORTANT THING FOR US TO SUCCEED AT IS THE LOYALTY PROGRAM. AND YOU'VE GOT, WITH SPG AND MARRIOTT REWARDS, TWO BIG GROUPS OF VERY LOYAL CUSTOMERS.
QUICK: SO I DON'T LOSE MY POINTS IN EITHER ONE OF THESE PROGRAMS?
SORENSON: WE'VE GOT TO MAKE SURE YOU'RE ENTHUSIASTIC ABOUT THE WAY THE CHANGES HAVE WORKED.
SORKIN: AND THERE ARE A LOT OF REPORTS, BY THE WAY, AMONG THE TRAVELLING, SORT OF THE GROUPIES, WHO ARE WORRIED ABOUT THIS.
SORENSON: FROM THE MOMENT WE ANNOUNCED, THEY WERE SAYING WHAT'S HAPPENING TO MY POINTS AND WILL IT GET BETTER, WILL IT GET WORSE. NOW, I THINK WE CAN MAKE SURE THE BENEFITS STAY THE SAME, IF NOT GET BETTER. BUT OFFER THEM A BROADER SELECTION OF PLACES TO STAY.
REBECCA PATERSON: HOW LONG DOES IT TAKE TO ROLL THAT OUT? SHOULD WE SEE AN OUTCOME ON THIS IN THREE MONTHS, SIX MONTHS, A YEAR?
SORENSON: WELL, I HOPE WE CAN DO SOME THINGS VERY, VERY QUICKLY. AT THE SAME TIME, WE'VE GOT AMEX WITH A CREDIT CARD AND THIS SPG PROGRAM, AND JPMORGAN CHASE VISA WITH A CREDIT CARD IN THE OTHER PROGRAM. WE GOT TWO DIFFERENT TIME SHARE COMPANIES WITHIN THESE PROGRAMS.
SORKIN: THAT WAS GOING TO BE THE QUESTION.
SORENSON: SO WE GOT TO WORK THROUGH ALL THOSE THINGS.
SORKIN: KEN CHENAULT HAS BEEN UNDER QUITE SOME PRESSURE AS YOU KNOW. ARE YOU GOING TO STICK WITH KEN OR ARE YOU GOING TO GO WITH JAMIE OR ARE YOU GOING TO STICK – CAN YOU HAVE BOTH?
SORENSON: ONE OF THE GREAT THINGS ABOUT THIS DEAL WHEN WE FIRST ANNOUNCED IT IN NOVEMBER IS I HAD I HEARD FROM KEN CHENAULT AND JAMIE DIMON WITHIN HOURS. I HEARD FROM INDRA NOOYI AND MUHTAR KENT WITHIN HOURS. IT GIVES YOU A SENSE OF THE INTEREST OF THESE COMPANIES IN WHAT WE DO. THEY ARE ALL GOOD PARTNERS OF OURS AND WE'LL WORK THROUGH WITH THEM OVER TIME.
SORKIN: BUT A YEAR OR TWO FROM NOW DO YOU HAVE TO PICK SIDES?
SORENSON: IN SOME AREAS WE'LL PICK SIDES AND SOME AREAS WE PROBABLY WON'T HAVE TO PICK SIDES. AND AGAIN, WE'LL INVOLVE OUR CUSTOMERS IN THIS. THESE LOYAL CUSTOMERS ARE THE PRIMARY REASON FOR DOING THIS DEAL SO WE WANT TO MAKE SURE THEY FEEL GOOD ABOUT IT.
JOE KERNEN: BOOKINGS IN EUROPE ARE DOWN WHAT SINCE BELGIUM?
SORENSON: WELL, LOTS OF CANCELLATIONS IN BRUSSELS, OF COURSE.
KERNEN: ROME?
SORENSON: MUCH LESS SO. AND YOU GOT A LITTLE BIT – YOU GET A LITTLE SOFTNESS. I MEAN, OBVIOUSLY YOU END UP WITH MUCH MORE VISIBLE POLICE PRESENCE IN ALL THE EUROPEAN CAPITALS IN THE LAST WEEK OR TWO. SADLY WE'VE BEEN THROUGH THIS A LITTLE BIT BEFORE. WE WOULD EXPECT THAT THIS WILL BE, YOU KNOW, A FEW WEEKS, MAYBE A COUPLE OF MONTHS. AND THEN FOLKS WILL START TO COME BACK. IF THERE'S ANOTHER EVENT, OBVIOUSLY THAT IS DIFFERENT.
KERNEN: WHAT DO POLICYMAKERS NEED TO DO HERE AND IN EUROPE? I MEAN THIS IS A – WHAT IF THERE ARE 300, 400 MORE GUYS THAT THEY BROUGHT BACK. THAT'S FRIGHTENING.
SORENSON: YEAH, I MEAN IT'S OBVIOUS THEY'VE GOT TO SHARE DATA. YOU THINK ABOUT THE U.S. KNOWING WHO THESE FOLKS WERE IN BRUSSELS AND BRUSSELS NOT KNOWING WHO THEY WERE. AND WE'VE GOT TO GET TO A PLACE WHERE GOVERNMENTS ARE COORDINATED IN THIS STUFF.
SORKIN: SECURITY – WHAT DO YOU GUYS DO?
SORENSON: WE HAVE A CODE LEVEL IN EFFECT IN EVERY MARKET AROUND THE WORLD AND SOME WHICH ARE PERPETUALLY RED. WE ARE SEARCHING PEOPLE BEFORE THEY GET TO THE HOTEL GROUNDS.
KERNEN: IN TROUBLE SPOTS HOTELS ARE THE CHOICE, TOO.
SORENSON: YEAH, IN AN EVENT LIKE THIS, WE WILL ELEVATE THE THREAT CODE.
SORKIN: AND DO YOU SHARE INFORMATION? MEANING YOU HAVE THE BOOKINGS SO YOU KNOW WHO ARE SUPPOSED TO BE COMING. YOU HAVE THE CREDIT CARD. YOU SHOULD KNOW WHO IS COMING, WHO IS GOING WHERE. DOES THAT INFORMATION EVER GET SHARED WITH GOVERNMENTS OR SECURITY OFFICIALS?
SORENSON: USUALLY NOT. I MEAN IN A PARTICULAR MARKET WHERE THERE'S BEEN A RUMOR MAYBE OF AN EVENT HAPPENING. THE GOVERNMENT, LOCAL AUTHORITIES PROBABLY WOULD TELL US SOMETHING AND THERE WOULD BE ON THE GROUND SOME EFFORT TO COORDINATE AND MAKE SURE WE ARE HEARING WHAT WE CAN HEAR AND SHARE THE INFORMATION.
QUICK: WHAT HAPPENED IN PARIS BOOKINGS AFTER BRUSSELS? HOW LONG DID IT TAKE THE PARIS BOOKINGS TO COME BACK UP AFTER THE EVENT THERE IN NOVEMBER AND AFTER WHAT HAPPENED IN BRUSSELS?
SORENSON: SO THAT WAS MID-NOVEMBER, I THINK. AND THEY PROBABLY DROPPED 20% TO 25%.
QUICK: HAVE THEY STABILIZED?
SORENSON: IN JANUARY, MID-JANUARY, THE TEAM THERE WAS SAYING WE ARE STARTING TO SEE LIFE THAT THEY ARE COMING BACK. BY FEBRUARY, MARCH, BEFORE BRUSSELS, WE WERE PROBABLY RUNNING DOWN HIGH SINGLE DIGITS FROM A YEAR BEFORE. SO STILL SOME IMPACT, BUT BUILDING BACK.
QUICK: WHAT HAPPENED AFTER BRUSSELS? DID IT CHANGE ANY?
SORENSON: I DON'T HAVE DATA FOR PARIS AFTERWARDS. I'M SURE IT HASN'T HELP.
SORKIN: I WANT TO GO BACK TO THE DEAL IF I COULD FOR A SECOND. IS THERE ANY INTENT TO COLLAPSE SOME OF THE BRANDS BECAUSE OF THE OPPORTUNITY IN TERMS OF THE SYNERGY OR TO RENAME CERTAIN PROPERTIES FROM AN ADVERTISING PERSPECTIVE YOU ACTUALLY INSTEAD OF HAVING TO ADVERTISE SO MANY DIFFERENT BRANDS YOU WILL BE ABLE TO DO JUST A COUPLE OF THEM?
SORENSON: GENERALLY, NO. AND REMEMBER WE ADVERTISE OFTEN THROUGH THIS LOYALTY PLATFORM SO WE'RE NOT NECESSARILY MARKETING EACH OF 30 DIFFERENT BRANDS WITH ITS OWN SEPARATE MARKETING FUND. BUT ALSO, WE'VE GOT SEPARATE OWNERS OF EACH OF THESE HOTELS. AND OUR CONTRACTS ARE LONG TERM. WE RUN THEM FOR THEM IF IT IS MANAGED OR THEY FRANCHISE. WE DON'T TEND TO HAVE THE RIGHT IF YOU'RE A HOTEL OWNER TO SAY WE'VE JUST DECIDED TO CHANGE THE BRAND NAME ON YOUR HOTEL TO SOMETHING ELSE. AND SO THAT WOULD BE SOMETHING THAT REALLY YOU HAD TO WORK THROUGH WITH A COLLECTION OF OWNERS. I THINK INSTEAD WE'LL TRY AND DO WHAT WE CAN TO DRIVE DISTINCTIONS BETWEEN THE BRANDS. MAKE SURE WE GOT GOOD BRAND STRATEGIES.
SORKIN: RIGHT. THAT'S ACTUALLY INTERESTING. WHICH OF THE BRANDS DO YOU THINK ARE TOO CLOSE RIGHT NOW?
SORENSON: WELL, I THINK IN THE BROAD – WELL, LET'S TAKE AN EASY ONE. RITZ-CARLTON AND ST. REGIS. TWO STRONG LUXURY BRANDS. THEY HAVE BEEN COMPETING AGAINST EACH OTHER NO DOUBT. RITZ-CARLTON IS A BIGGER BRAND THAN ST. REGIS IS. AS A CONSEQUENCE IT IS PROBABLY A BIT BETTER KNOWN THAN ST. REGIS IS. WE THINK THERE'S PLENTY OF ROOM FOR BOTH OF THOSE LUXURY BRANDS WHEN YOU LOOK AT DEMOGRAPHICS AROUND THE WORLD –
SORKIN: AND THEN WHAT WILL YOU DO, THOUGH – IT'S INTERESTING – TO DIFFERENTIATE THEM?
SORENSON: YEAH, WE'LL HAVE TO FIND SOME THINGS AROUND MAYBE SOME PRODUCT CUES, MAYBE SOME SERVICE CUES THAT ESSENTIALLY SAY HERE YOU COULD KNOW YOU'RE IN A ST. REGIS, HERE YOU COULD KNOW YOU'RE IN A RITZ-CARLTON.
KERNEN: ANDREW DOESN'T WANT YOU TO GET RID OF ANY OF THE RITZ-CARLTONS OR ST. REGIS' BECAUSE THERE IS A LUXURY, RIGHT?
SORKIN: I'M A HOTEL SNOB AND YOU KNOW IT. PROUDLY SO.
KERNEN: YOU ARE, I KNOW. ARNE, YOU ARE A LEADER OF NOT JUST THE COMPANY, BUT YOU'RE A LEADER AND YOU'VE WRITTEN ON ANTI-DISCRIMINATION MEASURES. YOU WERE ONE OF THE 100 TO SIGN THE NORTH CAROLINA BILL. WHAT'S GOING TO HAPPEN IN NORTH CAROLINA? IS THERE A THREAT, AN IMPLIED THREAT FROM THE 100 CEOs OF WHAT'S GOING TO HAPPEN? WHAT WOULD YOU DO IN NORTH CAROLINA IF THIS DOESN'T GET REPEALED?
SORENSON: YEAH, WELL I THINK IT IS GOING TO BE VERY INTERESTING TO SEE HOW THIS MOVES. I MEAN, YOU'VE SEEN PARTICULARLY IN THE LGBT AREA A MASSIVE SHIFT TOWARDS ACCEPTANCE IN HOSPITALITY. AND NOW MAYBE THERE'S A LITTLE BIT OF A COUNTER WAVE OCCURING IN SOME PLACES. AND YOU'VE GOT CUSTOMERS WHO CAN VOTE WITH THEIR FEET. SO WHEN WE SPOKE UP IN INDIANA, WE WERE ALREADY GETTING CANCELATIONS FROM GROUPS THAT WERE SAYING WHY SHOULD WE HOLD OUR MEETING IN INDIANA. AND INDIANA MOVED QUICKLY TO SAY, YOU KNOW WHAT? WE DON'T WANT THAT LABEL ON OUR HOSPITALITY, ON OUR CULTURE. WHAT HAPPENS IN NORTH CAROLINA EXACTLY WHO KNOWS. THERE WILL BE SOME POLITICIANS WHO ARE, I THINK, NOT TERRIBLY BRIGHT, WHO THINK THAT THEY CAN PUT A STAKE IN THE GROUND AND BE PROUD OF THIS. BUT I THINK THEY WILL HURT BUSINESS IN THEIR STATE.
KERNEN: YOU SAW GEORGIA, THE GOVERNOR VETOED THAT IMMEDIATELY. AND I READ EVERY WHERE "HUFFINGTON POST" GEORGIA GOVERNOR VETOES. NEVER ONCE. GEORGIA'S GOP GOVERNOR. GEORGIA'S REPUBLICAN – NEVER MENTIONED. OH, NO. THAT GOES AGAINST THE HUFF POST NARRATIVE. IT WASN'T A DEMOCRAT THAT DID IT.
SORENSON: NO, THAT'S RIGHT. BUT A VERY THOUGHTFUL GUY WHO SAID I KNOW THE IMPACT ON MY STATE.
KERNEN: EXACTLY. IT GOES ACROSS. I HATE THOSE STEREOTYPES. IT GOES ACROSS PARTY LINES.
QUICK: ARNE, ONE QUESTION REALLY QUICKLY. MARRIOTT SHARES CAME UNDER PRESSURE YESTERDAY WHEN ANBANG ANNOUNCED THAT IT WAS PULLING OUT. WHAT DO YOUR SHAREHOLDERS NOT LIKE ABOUT THIS?
SORENSON: WELL, I THINK THEY LIKE THIS DEAL ACTUALLY.
QUICK: STOCK HAS GONE UP AND DOWN BY ABOUT $3.50.
SORENSON: I THINK – YOU'VE GOT SOME TECHNICAL THINGS GOING ON. SO ONE OF THE TRADES THAT WAS PUT ON THE MOMENT WE ANNOUNCED WAS TO SHORT MARRIOTT AND LONG STARWOOD. AND THOSE SHORTS HAVE COVERED AT TIMES WHEN ANBANG SURFACED. THEN THEY REIMPOSED THEIR POSITION. WE PROBABLY HAD SOME SHORT POSITIONS BEING REIMPOSED LAST NIGHT. OBVIOUSLY THERE WAS SOME LIKELIHOOD THAT POSSIBILITY THAT ANBANG WOULD INCREASE ITS OFFER AND SO THE STARWOOD PRESSURE IS THERE TOO. YOU CAN'T LOOK AT THIS ON CERTAINLY AFTER HOURS TRADING OR EVEN A ONE DAY BASIS. THIS IS WHAT DO WE ACHIEVE LONG TERM AND WE ARE STILL ABSOLUTELY THRILLED ABOUT IT.
SORKIN: OK, ARNE. COME ON BACK. THERE'S A LOT MORE TO TALK ABOUT. WE APPRECIATE IT. CONGRATULATIONS.
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