Doubletree, Promus To Merge $1.8 Billion Deal Will Create Nation’s No. 3 Lodging Chain

Promus Hotel Corp. would gain a controlling interest in Doubletree Corp. in a merger that would create the nation’s third-largest hotel chain.

The deal announced Tuesday values Doubletree at $1.78 billion and unites its Doubletree and Red Lion lodging brands with such Promus chains as Embassy Suites.

The company created, to be known as Promus Hotel Corp., would manage or franchise a system with $5 billion in annual revenue, trailing only No. 1 Holiday Inn and No. 2 Marriott. It would have 1,136 hotels, approximately 172,000 rooms, and more than 40,000 employees in the United States and parts of Latin America and Asia.

Based on the number of shares outstanding, Promus’ current shareholders will own 54 percent of the new Promus and Doubletree shareholders the remaining 46 percent.

The companies said they expect the merger to be completed by the end of 1997, although it first must clear a federal antitrust review and win shareholder approval. The major shareholders in Doubletree have already endorsed the agreement.

Promus, based in Memphis, Tenn., is the franchiser and operator of the Embassy Suites, Hampton Inn, Hampton Inn & Suites, Homewood Suites, Embassy Vacation Resort and Hampton Vacation Resort brands. Embassy Suites, an upscale chain, accounts for more than half its revenue.

Promus has more than 900 hotels and 115,000 rooms throughout the United States, Canada, Mexico, Latin America and Asia.

Doubletree, based in Phoenix, is the exclusive franchiser of Doubletree Hotels, Doubletree Guest Suites, Club Hotels by Doubletree and Red Lion hotel brands. It acquired Red Lion last year for $1.2 billion.