$6 Billion Cruise Deal
P&O Princess Cruises plc and Royal Caribbean Cruises Ltd. have agreed to merge their companies in a deal approaching $6 billion, a move that will effectively create the world's largest cruise vacation group. The merger, spurred by an already softening economy and the September 11 terrorist attacks that have left cruise companies, among other transportation operators, grappling to fill ships, involves two companies with an aggregate revenue of more than $5 billion in the 12 months preceding September 30, 2001. The new company, which will pose a serious threat to Carnival Corp. - to now the world's largest cruise shipping organization - will commandeer 41 ships and some 75,000 berths, with another 14 ships and 30,000 berths coming on line in the next three years.
P&O Princess Rejects Carnival’s Offer
The Board of P&O Princess states that, at the end of last week, Carnival conveyed its interest in a possible transaction with P&O Princess. Carnival's proposal is subject to several pre-conditions including regulatory approval and financing. After consider Carnival's proposal and reviewed it with its financial and legal advisors. Based on this review, the board has concluded that the proposed dual listed company transaction with Royal Caribbean remains the most attractive alternative for P&O Princess shareholders. The board believes, and has been advised, that the Carnival proposal is not as favorable financially to P&O Princess shareholders and would face greater execution risk than the transaction with Royal Caribbean.
