Marriott Vacations Worldwide Corp. agreed to buy ILG Inc. for about US$4.7 billion in a stock and cash deal, creating the largest luxury brand for timeshare vacation resorts.

The deal, a 16 per cent premium to the closing share price on Friday, will see ILG shareholders receive US$14.75 in cash and 0.165 of MVW common stock for each share. The deal is expected to create annual savings of $75 million within two years of closing.

ILG had been facing activist pressure since last year to strike a merger with a competitor. The combined firm will have revenues of US$2.9 billion and own more than 100 vacation properties around the world. It will also have exclusive access to the Marriott International and Hyatt loyalty programs for vacation ownership.

For shareholders, the deal “provides them with immediate and compelling cash value and the opportunity to meaningfully participate in the long-term growth potential of a powerful combined company," said Craig Nash, chairman and chief executive officer at ILG. "The strategic rationale for this transaction is clear. Combining these two highly complementary businesses will create an industry leader with enhanced scale and a broader product portfolio that will have great benefits for our members, owners and guests.”