US private equity group Blackstone has announced that it is to buy the Hilton Hotels chain in a deal worth $26 billion (£13 billion).
Hilton stockholders will be paid $47.50 (£23.54) under the deal, which represents a premium of 40 per cent on the hotel company's closing share price on Monday.
Announcing the takeover agreement, which was approved by Hilton's board of directors yesterday, Blackstone said it intended to invest in the company's properties in order to grow the business for the benefit of both shareholders and customers.
The private equity group already boasts a portfolio of more than 100,000 hotel rooms across the US and Europe, with its interests including the La Quinta Inns chain and LXR Luxury Resorts and Hotels.
Hilton, founded by the great-grandfather of American socialite Paris Hilton in 1919, has a number of brands to add to Blackstone's including Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hampton Inn and The Waldorf-Astoria Collection.
Commenting on the deal, which is subject to the approval of Hilton shareholders, Blackstone's senior managing director Jonathan Gray said: "This transaction is about building the premier global hospitality business.
"We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business," he added.
Hilton's chief executive Stephen Bollenbach said the group's board of directors had concluded that the takeover deal provided "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," he added.
The takeover deal, one of several offers made by private equity groups for hotel assets this year, is expected to be completed during the fourth quarter of 2007.