• The 60,000 million pesetas operation will involve a payment of 27,000 million pesetas and 13,222,266 Sol Meliá shares valued at 15 euros per share.

• In addition Sol Meliá will acquire the Fénix Hotel in Madrid and the Colón Hotel in Seville, valued at 12,500 million pesetas.

• Rufino Calero, Chief Executive Officer of TRYP, will join the Sol Meliá Board of Directors.

According to the agreement signed by Sol Meliá�s Vice-Chairman, Sebastián Escarrer, the Chairman of TRYP, Antonio Briones and the Chief Executive Officer of TRYP, Rufino Calero, a payment will be made of 27,000 million pesetas and 13,222,266 Sol Meliá shares valued at 15 euros per share. TRYP shareholders will thus become owners of approximately 7.2% of the hotel chain�s capital and Rufino Calero will join Sol Meliá�s Board of Directors.

This operation has also included the purchase by Sol Meliá of the two flagship properties the Fénix Hotel in Madrid and the Colon Hotel in Seville. These are being purchased for a total of 12,500 million pesetas.

The merger of the Sol Meliá and TRYP hotel groups is expected to generate significant operational, administrative, fiscal and legal synergies. It is estimated that the cost savings created by the merger of the two companies will exceed 1,000 million pesetas per year.

The operation will be finalised on approval by the Sol Meliá Shareholders� General Meeting which will take place at the end of September. The Meeting must also approve the capital increase and the alterations to the Board of Directors required under the terms of the agreement. Following the capital increase, the Escarrer family will hold a stake of approximately 61% while former TRYP shareholders will own 7.2%, making them the second largest shareholder of Sol Meliá.

Both companies have been assisted in the operation by external advisors, AB Asesores Morgan Stanley and Uría & Menéndez on behalf of TRYP, and UBS Warburg and Cuatrecasas on behalf of Sol Meliá.

The acquisition involves the addition of 60 hotels with more than 9,700 rooms and another 15 hotel development projects already signed by TRYP to the 275 hotels which Sol Meliá already operates in 29 countries. The new hotels will strengthen Sol Meliá�s global diversification strategy, resulting in a mix of 48% of resort hotels and 52% of hotels located in the world�s major cities.

Integration of complimentary teams

The agreement also foresees the integration of the TRYP team � executives and staff � with the Sol Meliá team, leading to new career development opportunities for the more than 33,200 staff who will form part of the company. TRYP has a total staff of 2,179 people.

For Sol Meliá�s Vice-Chairman, Sebastián Escarrer, �TRYP is the ideal size for the integration to be carried out quickly and effectively, obtaining significant operational synergies. The combination of the hotels offered by the two companies also consolidates Sol Meliá�s strategic positioning in Spain, the world�s second most popular tourism destination, with the incorporation of highly prestigious hotels in major cities. This allows us to strengthen our leadership position in a market which is clearly progressing and which we believe to have a very bright future. We will also increase our leadership position in other important destinations such as the Caribbean and Tunisia�.

�In line with our stated policy of creating greater value for our shareholders, the agreement will allow us to increase the size and profitability of the company, leading to an increase in our earnings per share� .

As far as the Chief Executive Officer of TRYP, Antonio Briones, is concerned, �the agreement will allow the company to acquire an ideal size to consolidate its solid position in an increasingly global economy, bringing improved results in both quantity and quality. Sol Meliá�s international experience is the perfect compliment to the global vision which is so necessary in today�s competitive market in order to be able to create value and satisfy the ever-increasing needs of our clients, wherever they may be. With the merger of the two companies, our employees will be fully integrated into a Group which is constantly growing and providing excellent opportunities for their career development.

Rufino Calero, Chief Executive Officer of TRYP, considers that �this agreement will represent the consolidation of a great hotel company with mainly Spanish capital, and the unification of two complementary strategies that will enable new projects to be developed which will see the company continuing to improve its position in the world-wide ranking. Our two companies have always maintained a good relationship, despite the fact that we have been competitors, and I feel great pride and satisfaction to be able to continue in such a prestigious business project�.

Amongst the ten leading hotel companies in the world, with 410 hotels.

Sol Meliá, which currently comprises 275 establishments with over 71,500 rooms, has already signed a further 62 contracts for the operation of new hotels with 17,464 rooms to be added over the coming months. Likewise, TRYP, which currently operates 60 hotels, has signed contracts for the integration of an additional 15 hotels over the next eighteen months with nearly 4,000 rooms located in Spain, the Caribbean, Tunisia and Portugal.

Following the incorporation of these 77 additional hotels, Sol Meliá will offer a portfolio of 410 hotels with 102,450 rooms in 32 countries, becoming one of the ten leading hotel chains in the world ranked by number of rooms.

Sol Meliá will further strengthen its clear leadership in the city hotel market in Spain with 97 hotels and 15,000 rooms, including the TRYP hotels which will now be incorporated in major cities, 20 of them in Madrid. Amongst others, the hotels that will join the company are such emblematic properties as the Fénix in Madrid, the María Pita in A Coruña and the Colón in Seville.

Fénix c/ Hermosilla,2. Madrid 28001

Many other prestigious hotels in Spain will also be added to the portfolio, including the Rex, Capitol, Gran Vía, Reina Victoria, Monte Real, Ambassador and Centro Norte in Madrid, the Presidente in Barcelona, the Sofía Parquesol in Valladolid, the TRYP Valencia, the Rey Pelayo in Gijón and the Orly in San Sebastián.

In the Spanish resort hotel market, Sol Meliá will add 16 TRYP hotels, including properties such as the Mondariz in Pontevedra and the TRYP Tanau in the Valle de Arán, thus also strengthening its leadership position in this important market.

As far as international resort hotels are concerned, eight hotels in Tunisia will be added along with one in Andorra, one in Portugal and three in Cuba. In Tunisia and Cuba the company will thus further extend its existing leadership position in two important tourism destinations.

TRYP has invested over 3,300 million pesetas over the past two years in the modernisation of its hotels and, following signature of the agreement, has promised an additional 2,000 million peseta investment. Sol Meliá, for its part, has invested over 25,000 million pesetas in the past three years in the total renovation of its hotel portfolio.

Complementary �e-transformation�.

The complementary nature of the deal is one of its most important characteristics. The addition of the new hotels will also represent the unification of the ambitious �e-transformation� projects recently initiated by both Sol Meliá and TRYP.

Both companies are investing in technology and implementing SAP ERP platforms which will enable the centralisation of purchasing processes, allowing them to be carried out on line, and thereby improving efficiency and the company�s internal administration while achieving more competitive pricing and reductions in operational costs. The new platform allows more efficient hotel operations and the adaptation of all systems to the new technology environment.

Furthermore, the addition of the hotels to the Sol Meliá chain also provides a series of further advantages, such as the use of a sole central reservations system (SolRes), new sales activities, savings in operational costs, the strengthening of loyalty programmes and a greater capacity for strategic alliances.

Sol Meliá�s net profits increased by 74% in the first half of the year

Sol Meliá obtained consolidated net profits of 9.850 million pesetas in the first half of the year, representing an increase of 74% over the same period in the previous year. Revenues grew by 26% to 63.576 million pesetas.

Operating profits before interest, amortisation and taxes reached 19,300 million pesetas, an increase of 41% over 1999.