NH will become the leading hotel chain in Spain, overtaking current leaders Sol Meliá in terms of number of hotels, thanks to an agreement reached today with the Catalan chain, Hesperia.

According to a spokesperson for the NH chain, the agreement will be formalised within the space of two months, but it looks likely at this stage that the 51 Heperia hotels will be managed and rebranded by NH, taking the latter's total number of hotels to 400.

As part of the agreement, which involves close co-operation between the two chains rather than a takeover of one by the other, Hesperia will at last be represented on NH's Administrative Council.

Hesperia, with a 25% stake, is the principle shareholder in NH, but has, up until now, been refused a seat on the company's Administrative Council in view of the fact that it was considered a competitor.  Negotiations between NH and Hesperia have been going on for several months now and relations between the two companies are said to be strained.

The objective of this agreement is to consolidate the hotel management business for both groups and achieve the maximum possible synergy between the two groups, allowing a unified and efficient management system of their combined establishments.

The Spanish Stock Market Monitoring Commission (CNMV) decided today to suspend trading in NH shares 'with immediate effect' 'until all the relevant information relating to the company has been provided'.