Private equity giant Blackstone has agreed to buy Hilton Hotels in a deal worth around $26 billion.

Hilton's board of directors approved the deal last night, and it will be completed sometime during the fourth quarter of 2007. Under the deal, Blackstone is paying $47.50 for each Hilton share.

The acquisition brings together a leading global hospitality company with Blackstone's extensive portfolio of hotels and resorts.

Blackstone in January 2006 acquired La Quinta Inns and Suites and currently owns more than 100,000 hotel rooms in the US and Europe.

US-based Hilton's other brands include Conrad Hotels, and the Waldorf-Astoria Collection. The global network of Hilton hotels were reunited as one company in 2006 after a 42-year split.

The reunion happened after Hilton Hotels Corporation (HHC) paid $3.3 billion to buy the 400 international Hilton hotels owned by UK-based Hilton Group. The division took place in 1964, when HHC sold off all its overseas hotels to concentrate on the US market.