The final $5.7 Billion unification

A major deal between the UK and the US based Hilton hotels brand, is all set to reunite the chain of hotels under single worldwide ownership after their split a good 41 years ago. As a part of the deal, the Hilton Hotels Corp. of United States has agreed to buy the hotels of its British namesake for 3.3 billion pounds (.7 billion).

Hilton Group's 400 global outlets (currently under the UK based HCC) will now join with HHC's 2,300 hotels in the US. The Hilton business split in 1964 due to financial constraints, with its U.S. counterpart running all Hilton hotels in the U.S. and that in UK operating the brand elsewhere around the world.

The deal, which will bring together 2,700 properties, will leave the UK group with its gambling business Ladbrokes. Ladbrokes, which takes bets ranging from sports, to politics, to the latest Pop Idol winner, is believed to be have been eyed by Rank Group, another U.K. gaming giant. Other big names believed to be interested in Ladbrokes are Blackstone Group and CVC Capital Partners.

According to the official statement made by the Hilton Group, Sir Ian Robertson would continue to be chairman of Ladbrokes while Christopher Bell would become chief executive. Current Hilton Group chief executive David Michels will transfer to the enlarged HHC. "We believe this transaction delivers significant shareholder value. The board is fully committed to Ladbrokes, which it believes is a strong and valuable business which will be well placed to deliver growth and good returns,� said Sir Ian.

Welcoming the development, Robert Lafleur, an analyst at Susquehanna Financial, said, "It makes sense for the companies to be consolidated so they're a unified, global lodging platform and it puts them on a par with their key competitors, who are Marriott and Starwood, both of which have integrated international platforms, so strategically the deal makes perfect and total sense."

According to Nick Hodson, an equity analyst at Lloyds TSB Private Banking, "It does seem to make sense for both sides, this allows a more focused play for the UK in terms of Ladbrokes. My hope is that standing alone, Ladbrokes gets re-rated to a similar kind of rating as William Hill and/or a private equity group decides to take the company off the market."

The transaction will bring together two companies that have been working together for years. The companies already have an alliance to share reservation systems, marketing and loyalty programs. They also agreed in 2000 to jointly develop luxury Conrad brand hotels worldwide. This chain of hotels has been named after the company's founder, and has about 20 hotels.