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BEVERLY HILLS, CA-Hilton Hotels Corp. and the Blackstone Group have closed on a previously announced $26-billion merger that gives Blackstone the keys to one of the world's largest hotel chains, with 2,896 properties and 490,000 rooms. The deal takes publicly held Hilton private, giving holders of the company's common stock $47.50 per share in cash, with Hilton's shares to cease trading on the New York Stock Exchange at the close of market today.

The deal is being financed with $20.6 billion of mortgage and mezzanine secured debt incurred by subsidiaries of Hilton and approximately $5.7 billion of equity invested by investment funds affiliated with the Blackstone Group. The secured debt is backed by substantially all of Hilton's consolidated assets and imposes significant restrictions prohibiting Hilton from incurring any other debt without the unanimous consent of the secured debt holders.

Blackstone has said that unlike its acquisition of Equity Office Properties, it foresees "no significant divestitures" in connection with the Hilton transaction. The company views Hilton as "an important strategic investment" that it plans to grow.