Citing, among other factors, a lackluster market for cruise shares on the U.S. stock exchange, P&O said it and Festival Cruises decided not to pursue the merger of their cruises businesses due to the continuing low valuations of cruise companies in the United States. The groups announced in May a deal to combine businesses as part of Peninsular and Oriental Steam Navigation cruises division in a deal worth up to $600 million. P&O runs Princess Cruises in the U.S., the U.K.’s P&O Cruises, and Aida Cruises of Germany. It plans to demerge these businesses from its core shipping and ports business later this year. Privately owned Festival said it would push ahead with expansion plans that include the delivery in 2001 and 2002 of two new ships under construction.