Wyndham is buying La Quinta's hotel franchise and management businesses for $1.95 billion in cash.
Wyndham said Thursday that the investment will push the hotel further into the upper-midscale segment.
Before the deal is closed, La Quinta Holdings Inc., based in Irving, Texas, will spin off real estate assets into a publicly traded real estate investment trust called CorePoint Lodging.
La Quinta shareholders will receive $8.40 per share. The deal also includes a $240 million reserve for estimated taxes expected for the CorePoint Lodging spinoff. Wyndham Worldwide Corp., based in Parsippany, New Jersey, will also repay about $750 million in debt held by La Quinta.
The sale is targeted to close in the second quarter, if approved by La Quinta shareholders.