BEVERLY HILLS,
Calif. -- Two months after confirming it was in discussions to
acquire the lodging assets of U.K.-based Hilton Group, or Hilton
International (HI), Hilton Hotels Corp. (HHC) pulled the switch on
the $5.71 billion deal, unifying the lodging company that was split
in two more than four decades ago.
Pending approval by
government entities and shareholders, the deal is expected to close
during the first quarter of 2006.
The acquisition encompasses
40 hotel properties currently owned by HI (most of which are in the
U.K. and Europe) 200 leased properties, and another 160 fee
contracts (mostly management contracts).
Additionally, HHC
would gain about 80 LivingWell Health Clubs (most of which are
managed), as well as full ownership of the Hilton HHonors Worldwide
program and Hilton Reservations Worldwide. Both have been 50/50
joint ventures with HI.
Also as part of the
deal, HHC gains worldwide ownership of the luxury Conrad Hotels
brand, which since 2002 has been operated as a joint venture with
HI. In addition, HHC obtains the rights
to the Hilton brand name throughout the world.
This transaction
represents the final and logical step in a process that began in
1997 with the signing of our strategic alliance, and is a unique
opportunity to once again position HHC as a global lodging industry
leader for the first time in more than 40 years, said Stephen
Bollenbach, co-chairman and CEO of HHC in a statement.
With the current
strength of our business in the U.S., our strong balance sheet, the
beginning of a hotel industry recovery in the U.K. -- which
accounts for about a third of HIs income -- and the success weve
had in working together with HI for eight years on such programs as
Hilton HHonors, Hilton Reservations, Conrad development and
technology initiatives, the time is right to put these two great
organizations together, Bollenbach continued.
Our customers can
look forward to enjoying even more opportunities as a result of the
combined strengths of the brands, added David Michels, chief
executive of the Hilton Group.
Once the
transaction is complete, Hilton Hotels Corporation will be one of
the largest lodging companies in the world, boasting a portfolio of
2,800 hotels and 475,000 rooms in 80 countries.
Hiltons brands
include Hilton, Conrad, Doubletree, Embassy Suites, Hampton Inn,
Hilton Garden Inn, Homewood Suites by Hilton, Scandic and Hilton
Grand Vacations Club.
To contact
reporter Michael Milligan, send e-mail to [email protected].