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Hotels and motels

Ladbrokes to Reunite with Hilton Under New Agreement

Strategic Insights

— 1 min read

Ladbrokes plc will return to its historical name after a deal is struck to sell its international hotels division to Hilton Hotel Corporation, marking the reunion of the two halves of the 2,700-strong Hilton worldwide hotel network. The agreement, worth £3.3bn, brings an end to four decades of the two companies operating as separate entities. Hilton Corporation's chief executive, Stephen Bollenbach, stated the transaction represents "the final and logical step" in their strategic alliance, which began in 1997. David Michels, chief executive of the London-listed Hilton Group, described the deal as "marrying your own cousin," indicating the challenging nature of the negotiations.

Key Takeaways:

  • The Ladbrokes plc and Hilton Hotel Corporation have agreed to a £3.3bn deal, which will reunite the two halves of the 2,700-strong Hilton worldwide hotel network.
  • The agreement marks the end of four decades of the two companies operating as separate entities.
  • Hilton Corporation's chief executive, Stephen Bollenbach, stated the transaction represents "the final and logical step" in their strategic alliance, which began in 1997.
  • David Michels, chief executive of the London-listed Hilton Group, will retire once the agreed deal is completed, with Chris Bell being appointed as the new chief executive.
  • The deal includes an agreement to plug Hilton Group's £111m pension deficit, with payments made equally by Ladbrokes and Hilton Corporation.
  • The betting division of Ladbrokes has already been the subject of private equity takeover approaches in recent weeks, with speculation that Chris Bell plans to aggressively expand the business in Europe and domestically.

Statistics:

  • £3.3bn: The value of the deal between Ladbrokes plc and Hilton Hotel Corporation.
  • 2,700: The number of hotels in the Hilton worldwide hotel network.
  • 86 years: The age of the Hilton worldwide hotel network, which was founded in 1919.
  • £111m: The amount of Hilton Group's pension deficit that will be plugged as part of the deal.
  • 5%: The percentage stake retained by the Hilton family in Hilton Corporation.

Sources:

  • "Ladbrokes to reunite with Hilton under new agreement" by Simon Bowers (The Times).
  • "Hilton Group to be sold off after 86 years" (The Sunday Telegraph).
  • "Ladbrokes deals the cards" (The Times).
  • "The Hilton Group's chairman, Sir Ian Robinson, said: "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."

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