Norwegian Cruise Line to buy Oceania, Regent Seven Seas
Three of the world's top cruise brands soon will be joining forces.
Fast-growing Norwegian Cruise Line (NCLH) on Tuesday announced a definitive agreement to acquire privately held Prestige Cruises International, the parent company of Oceania Cruises and Regent Seven Seas Cruises.
The $3.025 billion deal combines one of the world's biggest mass-market lines with two leaders of the upscale side of the cruise market. While Norwegian operates 13 large vessels that carry as many as 5,000 passengers apiece, Oceania and Regent operate more intimate ships that carry 490 to 1,250 passengers and offer a more luxurious — and pricey — experience.
"The acquisition of Prestige represents an extraordinary opportunity for Norwegian Cruise Line to expand our market presence by adding two established, award-winning brands in the upscale cruise segment with loyal followings," Norwegian CEO Kevin Sheehan says in a statement accompanying the announcement.
Sheehan said the combination would "pave the way for new cross-selling opportunities, cross-brand collaboration, (and) cross-business support, as well as joint partnerships which ... will provide solid accretion to earnings per share and drive long-term shareholder value."
The combination further consolidates the cruise industry, which is dominated by two big companies. Industry giant Carnival controls nearly half the world's ocean cruise business with 10 brands, including Carnival, Princess, Holland America, Cunard and Costa. Rival Royal Caribbean Cruises is the second-biggest player with six brands, including Royal Caribbean, Celebrity and Azamara. The two companies operate 100 and 42 ships, respectively.
Even after the acquisition, Norwegian will remain a distant third in size among cruise companies with 21 ships. But the 47-year-old firm is expanding rapidly. Norwegian has four ships on order for delivery between 2015 and 2019, which will come on the heels of two new vessels unveiled in the past 16 months. One of the targets of the acquisition, Regent, also has a ship on order for delivery in 2016.
Prestige is majority owned by private-equity giant Apollo Global Management, which also has a significant stake in Norwegian. Both cruise operators are based in the Miami area. Norwegian says the deal is expected to close in the fourth quarter of 2014.
Shares of Norwegian were up more than 10% Tuesday in early trading after the announcement.
Norwegian's last two new ships, the Norwegian Breakaway and Norwegian Getaway, are among the 10 largest in the world. For a deck-by-deck look at the most recent vessel, the Norwegian Getaway, click through the carousel below.
