Royal Caribbean Cruises Ltd (RCL.N) said on Thursday it would buy a 66.7 percent stake in privately owned Silversea Cruises for about $1 billion to add ultra-luxury and expedition cruises to its fleet.
Silversea Cruises, which has nine ships, sails to destinations including Antarctica, the Arctic and Greenland, with most of its tickets selling for more than $5,000.
In contrast, the most expensive cruises run by Royal Caribbean under its Azamara Club Cruises brand cost around $3,000.
“Ultraluxury and expedition cruises are gaps in our portfolio today,” Royal Caribbean Chief Executive Officer Richard Fain said on a conference call.
Shares of the U.S. cruise operator rose as much as 7 percent to $115.50, with the company also maintaining its full-year profit forecast despite higher fuel prices and a stronger dollar.
Including debt, the deal is valued at $2 billion. Royal Caribbean said it plans to finance the purchase through debt.
The 2018 total worldwide ocean cruise industry is estimated to reach $45.6 billion in revenue, a 4.6 percent increase over 2017, according to the industry analytics firm Cruise Market Watch. Royal Caribbean had nearly $9 billion in revenue at the end of 2017.
Silversea Chairman Manfredi Lefebvre d’Ovidio will get about 472,000 Royal Caribbean shares, payable after the Miami-based company achieves some 2019-2020 performance targets.
This translates to about $51 million, based on Royal Caribbean’s closing price on Wednesday.
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