P&O Princess Cruises took major steps forward last week,
with both boards recommending approval and the final merger
expected in April.
The deal would create one of the leading vacation companies in
the world and the largest cruise group by far, with 65 ships
offering 99,964 lower berths and another 18 ships to be added over
the next three and a half years.
“It will have a whole array of leading consumer brands in every
major cruise market in the world,” said Peter Ratcliffe, chief
executive of P&O Princess. “We’ll also have the opportunity to
reduce costs by taking advantage of the potential synergies between
the two groups.”
As part of the transaction, P&O Princess will change its
name to Carnival (UK) plc, although its brands will maintain their
well-established names.
Carnival Chairman and CEO Micky Arison will remain in that role
for the combined group, and Lord Sterling will retire as chairman
of P&O Princess, a move he had planned but delayed until the
takeover is completed.
Ratcliffe will serve as an executive director of both Carnival
and P&O Princess, with oversight of the existing P&O brands
Princess Cruises, P&O Cruises, Aida, A’Rosa, Swan Hellenic,
Ocean Village and P&O Cruises (Australia). The headquarters of
the combined group will be in Miami, with a corporate office in
London.
The announcements did not specifically mention the headquarters
of Princess Cruises in Santa Clarita, Calif. But both Ratcliffe and
Arison said major layoffs are not expected at either line.
“This isn’t a redundancy story, although naturally that’s a
question that’s asked,” Ratcliffe said. “This company will be
growing by 45 percent over the next four years, so it’s a great
opportunity for our staff.”
Although, he said, there inevitably “will be some changes that
will take place.” One immediate casualty was Nick Luff, P&O
Princess CFO; Arison wants Carnival’s CFO, Gerald Cahill, to assume
that role for the combined group.
Cost savings of about $100 million are expected by combining
purchasing and certain support functions, Ratcliffe said.
Because the original merger proposal has evolved into plans for
a company that will be listed on both the New York and London
exchanges, the European Commission will scrutinize the proposal
again. But both companies say that this second review will be a
formality, with approval expected in the first quarter. Ratcliffe
said he hopes to circulate final documentation to P&O Princess
shareholders by the end of February and to hold a meeting for final
approval in early April.
