Page 22: of Maritime Reporter Magazine (December 2001)
ruise Report $6 Billion Dollar Merger Tightens Cruise Industry
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On Tuesday, November 20, a major announcement shocked the cruise and financial industries when
Richard Fain, chairman and CEO of Royal Caribbean
Cruise Lines, and Peter Ratcliffe, CEO of P&O
Princess held a press conference in London to report that their two respective lines would join forces to form the world's largest cruise line, in a deal worth more than $6 billion. MR/EN had the opportunity to dial in to the conference, which occurred the morning of the merger at London's Lincoln Centre, to provide a first- hand account of this monumental transaction.
By Regina P. Ciardiello, senior editor
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The new conglomerate, which has tentatively been dubbed RCP Cruise Lines, will control 41 vessels and approximately 75,000 berths, including the RCCL and
Princess brands, as well as Celebrity, P&O Cruises,
Swan Hellenic, AIDA and A'Rosa. In addition, four vessels are scheduled to be added in the next three years. The combination is also expected to provide a significant cost savings, estimated at approximately $100 million on an annualized basis — 12 months sub- sequent to completion. With an average age of six years, the fleet will hold the world's largest ships, and will more than likely leave executives at Carnival
Corp., which up until this merger held the distinction as the world's largest cruise line, with some re-evaluat- ing of its financials and fleet capacity.
Operated as a combined entity, the new company will be, according to Fain, "a merger of equals using dual- istic company structure." Fain added that the new enti- ty provides "the benefits of the combination of a uni- fied board, unified management and unified financial results, while still being able to keep independent list- ings on the exchange. (Royal Caribbean is currently listed on both the Oslo and
New York Stock Exchanges, while P&O
Princess is traded via the London Stock
The newly equal company, of which
RCCL holds a 49.3 percent share, with
P&O checking in with 50.7 percent ownership, will be headquartered pri- marily in Miami, Fla., with one office in
London as well. It will be headed by
Fain as chairman and CEO and Ratcliffe and managing director and COO, as well as a 12-member board of directors and 10 non-executive directors; the transaction is expected to close (follow- ing regulatory clearances), by the sec- ond quarter of 2002.
According to Nick Luff, who current- ly serves as CFO of P&O, "regulatory approvals should be complete within the next six months, following competitive clearance from the U.K. and Germany."
He added that operations will then be expected to commence by 2003, provid- ing that "certain milestones are met by this time." If, however a mutually bene- ficial agreement cannot be agreed upon,
Luff contended, "In theory, we (P&O
Princess) could terminate the agree- ment."
Maritime Reporter & Engineering News
In an era filled with terrorism, turmoil, economic frustration, massive layoffs and steep cutbacks, two companies, with two distinct brands announced to the world on November 20 via a press conference from
London's Lincoln Centre, that they would join forces to form a new corporation with an estimated worth of $6 billion. Royal Caribbean Cruise Lines (RCCL), which has recently shed hundreds of employees, (not to men- tion the departure of Rick Sasso, president of its sub- sidiary Celebrity Cruise Lines), has entered into a "merger of equals," (according to chairman and CEO,
Richard Fain), with P&O Princess Cruise Lines.
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