At last check shares of Hilton Grand, Orlando, Fla., were trading 1.7% lower at $39.89. Apollo Global shares ticked up 0.3% to $45.91.
Under the terms, Hilton Grand will issue 34.5 million shares to Apollo, the New York private-equity giant, for Diamond.
At closing, holders of Hilton Grand will own 72% of Diamond and Apollo holders 28%.
Diamond Resorts is the largest independent timeshare operator, with 92 resorts worldwide, the companies said. The Las Vegas company caters particularly to families by including kitchens and extra bedrooms in its vacation units.
With this deal, the companies see Hilton's upscale brand and culture in its 62 resorts complementing Diamond's offerings. Combined, the company will operate 154 resorts, catering to 720,000 owners.
The deal will expand Hilton Grand's reach to more than 20 new markets.
Diamond focuses on regional outdoor, desert, and ski locations, while Hilton Grand is known for its beach and urban, attraction-based destinations.
Diamond Resorts in January 2020 expanded into the Manhattan market, to reach young people who travel for live events and to bustling urban locations.
Travel and tourism have been ravaged over the past year due to the pandemic. But the industry is hopeful that the distribution of the various coronavirus vaccines will enable a rebound in 2021.
The boards of Hilton Grand and Apollo Global approved the terms. The deal is expected to close this summer, subject to conditions including regulatory clearances. Hilton Grand holders also must vote to approve the stock issuance.