For years, the flagship hotels of both Jurys and the Doyle hotel groups - Jurys and the Berkeley Court - have operated back-to-back in Ballsbridge in Dublin. If agreement is reached, the newly formed Jurys Doyle Hotel Group will be the dominant force in the Irish hotel sector.

Most analysts believe the deal makes good sense for Jurys, as long as it doesn't pay over the odds for it. The Doyle group has been valued at more than £150 million, marginally less than Jurys, which has a market capitalisation of £220 million.

Jurys is offering to pay the five members of the Doyle family - Mrs Margaret Doyle, her son Mr David Doyle, and daughters, Mrs Eileen Monahan, Mrs Bernie Gallagher and Mrs Ann Roche - a mixture of Jurys shares and some cash for their shareholding.

Mr David Doyle will receive an entire cash settlement for his stake and will leave the group. But the other family members will retain a shareholding in Jurys and hold a non-executive role in the enlarged entity. The cash payment will be satisfied from Jurys existing resources and bank borrowings.

As with most of these agreements, the Doyle shareholders in the new group will most likely be tied into holding that equity for a minimum of 12 months but may be content to retain it over the longer term. The arrangement would leave the family with the largest stake in the Jurys Doyle Hotel Group.

Consolidation in the hotel sector has become the norm in the US and throughout Europe. Against this trend, the link-up between Jurys and Doyles will give the new group a critical mass to take on the major international players which are increasingly gaining a foothold in the Irish market.

Assuming the deal goes ahead, the group's dominance of the Irish hotel sector will also make it a highly attractive takeover target for an international hotel chain in the future.

Jurys has pursued an aggressive, high growth strategy over the past decade. In 1990 it operated three hotels. This has now swelled to nine plus eight inns in the Irish and UK markets. A new Jurys Inn is currently under construction in Manchester.

As well as strengthening its position in the Irish market, the acquisition will give Jurys an exposure to the US market for the first time. The Doyle group's new four star hotel, the Doyle Washington Hotel, on Connecticut Avenue is due to open later this year and will operate beside the three star Washington Courtyard and the Doyle Normandy Hotel. In total, the existing Doyle group will have a total of 525 bedrooms in the US city when the third hotel is fully operational.

Once the deal has been bedded down, some analysts believe the group may look to sell off some of the Doyle stable, possibly those outside Dublin city centre and to merge other parts of it under a single brand. The board will also be substantially enlarged. Mrs Monahan, Mrs Gallagher and Mrs Roche's husband, Mr Tom Roche, will become non-executive directors joining the 12-member board of Jurys.

Jurys initiated the negotiations with the Doyle group some weeks ago. The latter has been effectively on the market or seeking a new ownership structure for more than a year as some of the family members sought to sell their shares.