Blackstone Takes Out Hilton

Hilton Hotels (HLT Quote) agreed to be acquired by private-equity giant Blackstone Group (BX Quote) in a massive deal valued at $26 billion.

The newly public Blackstone will pay $47.50 a share for the hotel operator, which owns brands such as Hilton, Doubletree, Hampton Inn and Embassy Suites. The price represents a 32% premium over the stock's closing price Tuesday of $36.05.

Excluding debt, the deal is valued at roughly $18.5 billion.

Blackstone is already the owner of the hotel chain La Quinta, as well as luxury resorts such as the Boulders Resort and Spa in Arizona, the Golden Door Spa in San Diego and The Boca Raton Resort and Spa in Florida.

Hilton, based in Beverly Hills, Calif., owns more than 2,800 hotels in 76 countries.

"It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels," said Jonathan Gray, senior managing director of Blackstone. "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."

Blackstone said it doesn't expect any significant divestitures as part of the deal. The transaction is expected to close in the fourth quarter.