FelCor Lodging Trust has officially announced its plans to merge with RLJ Lodging Trust, creating one of largest public REITs dedicated to owning focused-service and compact full-service hotels.
Post-merger, RLJ is expected to have a pro forma equity market capitalization of approximately $4.2 billion and a total enterprise value of $7 billion.
The merger will establish the third-largest pure-play lodging REIT by enterprise value, creating meaningful scale to capitalize on cost efficiencies, negotiate leverage and access to capital, and the opportunity to strategically recycle assets and optimize the portfolio.
The combined company will have ownership interests in 160 hotels, including premium branded hotels located primarily in urban and coastal markets with multiple demand generators.
The all-stock transaction is expected to close by the end of 2017. Once the merger is finalized, the company will retain the RLJ Lodging Trust name.