Hilton Hotels to buy British group

LOS ANGELES — Hilton Hotels Corp. said Thursday it will buy the hotel assets of Britain’s Hilton Group PLC for 3.3 billion pounds ($5.7 billion) cash, creating the world’s biggest hotel company by revenue.

The deal reunites two brands that split in the 1960s, allowing Hilton to instantly overtake rivals such as Starwood Hotels & Resorts Worldwide Inc. and Marriott International Inc. It also makes Hilton, which had been limited in scope to the United States and Canada, a global player, which will allow the company to expand some of its well-known domestic brands, such as Hampton Inn, to India, China and other markets.

The deal, which had been expected since October, sent shares of Hilton up nearly 8 percent to $24 at the end of regular trading on the New York Stock Exchange, close to a 52-week high of $25.81. Shares of Hilton Group rose to to 368.75 pence ($6.37), up 4.25 percent, on the London Stock Exchange.

Under the terms of the deal, Beverly Hills, California-based Hilton Hotel will only acquire the British company’s lodging operations. Hilton Group will change its name to Ladbrokes PLC and focus on its online and in-store betting operation, which has hundreds of locations in Europe.

The deal is subject to regulatory and shareholder approval on both sides of the Atlantic. Both companies said it was likely to be completed by the first quarter of 2006.