NEW YORK, July 3 (Xinhua) -- Hilton Hotels Corporation announced Tuesday that it has entered into a definitive merger agreement with the Blackstone Group in an all-cash transaction valued at approximately 26 billion dollars.

    Under the terms of the agreement, Blackstone will acquire all the outstanding common stock of Hilton for 47.50 dollars per share, said a news release reaching here.

    The price represents a premium of 40 percent over Monday's closing stock price.

    Hilton's Board of Directors approved the transaction Tuesday. It is anticipated that the transaction will close during the fourth quarter of 2007 while completion is subject to the approval of Hilton's shareholders, as well as other customary closing conditions.

    "Our priority has always been to maximize shareholder value. Our Board of Directors concluded that this transaction provides compelling value for our shareholders with a significant premium," said Stephen F. Bollenbach, Hilton's co-chairman and chief executive officer.

    Blackstone currently owns more than 100,000 hotel rooms in the United States and Europe.