GREENWICH, CT-All things Le Meridien have changed hands. The London-based company’s 32-property portfolio was sold to a 50-50 joint venture of an affiliate of locally based Starwood Capital Group Global LLC and an affiliate of Lehman Bros. Le Meridien’s brand, management portfolio and franchise business, which covers 132 properties, was sold to publicly held Starwood Hotels and Resorts Worldwide Inc. Starwood Hotels and Resorts says the purchase price for its piece was $225 million, which is close to the amount of Le Meridien debt it holds (including accrued interest). Starwood Capital Group’s cost to acquire Le Meridien’s operating properties was not released by the privately held company and not otherwise immediately first reported a deal was in the works in April.

The properties will be managed under their current flags by Starwood Hotels. Starwood Capital says it and Lehman plan to retrade several of the hotels in the near future. They will be sold unencumbered by brand affiliation, according to Starwood Capital.

The owned and leased Le Meridien portfolio consists of four- and five-star hotels totaling about 8,000 hotel rooms and located in 16 countries. The hotels are located primarily in Europe but also in North America, Africa, and South America. Signature properties include the Hotel Eden in Rome; the Le Meridien Dona Filipa and Le Meridien Penina Golf & Resort properties in the Algarve, Portugal; and the 1,025-key Le Meridien Etoile in Paris.

The transaction was consummated after nearly two years of negotiations. Starwood Capital chief executive Barry Sternlicht says the transaction widens Starwood Hotels and Resorts’ footprint in Europe, Africa, Middle East and Asia Pacific. It also furthers the company’s shift from its significant real estate ownership to a management and franchise fee focused model, which was highlighted earlier this month when it agreed to sell 18,964 rooms in 38 properties to Host Marriott Corp. for approximately $4 billion in stock and cash, or about $210,00 per key.

Le Meridien’s development plan includes opening 10 additional hotels in 2006, including properties in India, Thailand and China. Management and franchise fees from the hotels expected to operate under the Le Meridien flag in 2006 are estimated to be approximately $45 million. Not accounting for the cost of the transition, the deal is seen as being earnings neutral for the remainder of 2005 and slightly accretive in 2006.

Starwood Hotels and Resorts Worldwide Inc. CEO Steven Heyer says Le Meridien’s hotels are located in many markets where Starwood don’t already have a strong presence and its predominantly European customer base complements Starwood’s existing customer base.