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Hilton sold to Galileo owner for $26bn – UPDATED
US private equity group Blackstone – owner of Galileo, Gullivers and Orbitz – is to buy Hilton Hotels Corporation in a $26 billion (£13 bn) cash deal.
The group, which already owns 100,000 hotel rooms in the US and Europe, has pledged to expand Hilton, which has 480,000 rooms in 2,800 properties across 76 countries under brnads including Conrad, Embassy Suites, Hampton Inn, Hilton Garden Inn and the Waldorf Astoria Collection.
Blackstone said it viewed Hilton as an important strategic investment, adding: “No significant divestitures are envisaged as a result of this transaction”.
Hotel workers in the US welcomed the deal, which is due to be completed by the end of the year.
A statement from Blackstone, whose hotel brands include La Quinta, said the company intends to invest in the Hilton properties and brands globally “to enhance and grow the business”.
The private equity giant claims to have been the largest private investor in hospitality worldwide in the last 15 years with a strong track record of reinvesting in its hotels.
Blackstone’s senior managing director Jonathan Gray said: “It is hard to imagine a better strategic fit for us than Hilton. This transaction is about building the premier global hospitality business.”
The US hotel workers union – UNITE HERE – applauded the prospect of a major new player in the worldwide hospitality industry.
General president Bruce Raynor said: “We welcome this combination. We enjoy a positive partnership with Hilton Hotels. And, for its part, Blackstone has demonstrated its commitment to fair treatment for thousands of hotel workers in several major markets. This combination is good news for the workers of what will be the largest hotel owner in the world.”
Hilton co-chairman and CEO Stephen Bollenbach said: “Our priority has always been to maximise shareholder value.
“Our board of directors concluded that this transaction provides compelling value for our shareholders with a significant premium.
“We are delighted that a company with the resources and reputation of Blackstone fully appreciates the value inherent in our global presence, strong brands, industry leading marketing and technology programmes and unique portfolio of hotel properties.”
by Phil Davies
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