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Host to buy hotels for $3.4b

COLLEGE PARK, Md. -- Host Marriott Corp. will buy 38 hotels from Starwood Hotels and Resorts Worldwide Inc. for roughly $3.4 billion in a deal that Starwood hopes will free it to build its luxury brands and that boosts Host's upscale and overseas hotel and resort holdings.

The deal disclosed yesterday between the two hoteliers calls for Bethesda, Md.-based Host to give Starwood shareholders $2.33 billion of Host stock and pay $1.06 billion in cash. Host will also take on $700 million of debt.

Starwood, headquartered in White Plains, N.Y., owns and operates brand names including Sheraton, Westin, St. Regis, and W hotels. The company is moving toward a model of operating its properties, rather than owning them, an approach adopted by competitors such as Marriott International Inc.

The 38 hotels encompass about 19,000 rooms in the United States and abroad. It includes Starwood properties in New York City, California, Canada, the United Kingdom, and Chile. Two resorts in Fiji are also included.

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