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BEVERLY HILLS, CA-Hilton Hotels Corp. has agreed to buy Hilton Group PLC for $5.71 billion in an all-cash transaction that will unite the company globally for the first time in 40 years. The locally based company says that the acquisition of the Hilton Group PLC, which is known also as Hilton International, will create what is believed to be the largest and most geographically diverse lodging company in the world, with nearly 2,800 hotels and 475,000 rooms in 80 countries. So ends a round of negotiations GlobeSt.com has been following since the fall of this year. The publicly held Hilton Corp. says that the $5.71-billion acquisition price assumes an exchange rate of $1.73 per British pound and that the US dollar amount may change depending on the exchange rate at closing. The transaction is expected to close in the first quarter of 2006, subject to customary closing conditions including governmental approvals and the approval of Hilton Group shareholders.The deal includes the acquisition of 40 hotels owned by Hilton International, most of them in the UK and Europe, plus 200 leased properties, approximately 160 fee management contracts and approximately 80 LivingWell Health Clubs . The Beverly Hills company also will acquire full ownership of Hilton HHonors Worldwide and Hilton Reservations Worldwide, which have been 50/50 joint ventures with the London-based group and have been managed as part of a strategic alliance between the two companies.Hilton Hotels Corp. gets worldwide ownership of the luxury Conrad Hotels brand, which has operated as a joint venture between the two companies since 2002. The Hilton Group will retain its gambling and betting business and is expected to be renamed Ladbrokes PLC.The transaction represents “the final and logical step in a process that began in 1997 with the signing of our strategic alliance,” with the London-based Hilton entity, according to Stephen Bollenbach, co-chairman and CEO of Hilton Hotels Corp. Bollenbach points out that the two companies have worked together since then on a number of programs, including Hilton HHonors and Hilton Reservations.The combined company will remain headquartered in Beverly Hills, with Bollenbach retaining his same titles, Matthew Hart as president and COO, Robert La Forgia as SVP and CFO and the remainder of the HHC senior management team remaining in their current positions. Ian R. Carter, currently chief executive of Hilton International, will join HHC as EVP and CEO of Hilton International, with responsibility for managing international operations.Hilton founder Conrad N. Hilton built the company into a global organization, then in 1964 HHC spun off its international business to shareholders. That business went through a number of owners until it was acquired in 1987 by UK-based Ladbroke Group PLC.

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