Two of the largest operators in the cruise sector, P&O Princess Cruises and Royal Caribbean Cruises, are to merge in a $6 billion deal.
The merger, expected to be completed by the second quarter in 2002, will create the world’s largest cruise company with 41 ships, 75,000 berths and combined annual revenues in excess of $5bn.
As ever, the entrail-rakers were not impressed, questioning whether the union was “merger for merger’s sake?”. Pontificated Greg Johnson of ING Barings: “The problem with the industry is capacity and no-one is going to be scrapping ships as part of this, so all you are doing is taking out costs. The long-term industry dynamics don't change.”
The merged operation will be 50.7%-owned by P&O, the remainder by Royal Caribbean. It will be dually listed on the London and New York stock exchanges.
News source: Financial Times