Colony Capital LLC, a Los Angeles-based real estate investment firm, and a company owned by Saudi Prince Alwaleed bin Talal have agreed to purchase luxury hotel company Fairmont Hotels & Resorts Inc. for $3.9 billion.

The all-cash deal, valued at $45 per share, is the latest by Colony to add international hospitality brands to its portfolio. Fairmont, based in Toronto, Canada, owns and operates 87 properties with 34,000 rooms.

Last year, Colony picked up another luxury chain, Singapore-based hotel chain Raffles Holdings Ltd., for about $1 billion. The firm plans to combine Raffles and Fairmont to create a single luxury global hotel brand with 120 hotels in 24 countries.

"Colony's mission is to make major investments with world-class partners in irreplaceable assets managed by proven management teams," said Thomas Barrack, Colony's chairman and chief executive, in a statement. "Fairmont and Raffles are an excellent strategic fit."

Colony's burgeoning luxury hotel presence comes as other hotel companies are taking aim at luxury guests. Earlier this month, Beverly Hills-based Hilton Hotels Corp. announced it was introducing a new line of luxury hotels called the Waldorf=Astoria Collection.

In the combined portfolio, Raffles will keep its brand identity and Fairmont will remain an independent hotel management and ownership company. In L.A. County, there are only two properties under the Raffles and Fairmont flags: the Fairmont Miramar Hotel in Santa Monica and the Raffles L'Ermitage in Beverly Hills.

In total, Colony has invested $15.6 billion since its founding in 1991 and has rung up, on average, annual returns of about 20 percent. In the deal to acquire Fairmont, the firm bested an offer by billionaire investor Carl Icahn for 41 percent of Fairmont's outstanding shares at $40 per share. However, Icahn holds a 9.3 percent stake in Fairmont and stands to profit from the transaction.

Increasingly, Colony has been looking to build up its assets overseas. In addition to the Raffles acquisition last year, the firm plowed nearly $1.3 billion into Evry, France-based Accor, known for budget hotel brands Motel 6 and Red Roof Inns. Colony also owns Resorts International Holdings, one of the nation's largest gambling outfits with the Las Vegas Hilton and the Atlantic City Hilton under its umbrella.

Over the last few months, Fairmont's share price has increased in anticipation of a sale. On Monday, shares of Fairmont rose half a percent to settle at $50.70 after trading below $42 in October.

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