Royal Caribbean Ltd. buys big stake in Silversea Cruises
Although some insiders suspected that small, luxury ship operator Silversea was ups for grabs, he news last week that giant cruise ship operator RCCL was buying a major stake in the little luxury line, sent shock waves through the cruise industry.
What’s happening, pending approval from various sources, is Royal Caribbean Cruises Ltd. is buying a 66.7% stake in Silversea Cruises–the tony cruise line that operates intimate luxury liners and expedition ships designed for discerning seafarers.
Royal Caribbean’s stake has an enterprise value of somewhere between one and two billion dollars depending on your source. The purchase price of the equity being acquired is approximately $1 billion. RCL plans to finance the purchase through debt.
In addition, Silversea chairman Manfredi Lefebvre d’Ovidio will qualify for an estimated contingent consideration of approximately 472,000 RCL shares, payable upon achievement of certain 2019-2020 performance metrics.
“Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth,” said Richard D. Fain, Chairman and CEO of Royal Caribbean Cruises Ltd. “Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas.” Fain added: “We are proud to welcome aboard Manfredi Lefebvre, a visionary leader whose high standards and history of innovation we deeply respect. Manfredi will remain Executive Chairman of Silversea, continuing to lead its strategy long term.”
“This partnership will bolster the growth of this exceptional brand founded by my father,” said Lefebvre. “I have always been kindred spirits with Richard and we share a vision of offering excellence and leadership to our guests. This new partnership gives Silversea the opportunity to accelerate the growth of the most successful luxury and expedition cruising brand in the world.” The strategic rationale for the partnership includes:
- Driving long-term capacity growth in the burgeoning luxury and expedition segments at a much larger scale than what Silversea would achieve independently;
- Diversifying Royal Caribbean’s portfolio and increasing its expedition offerings by adding a premiere ultra-luxury brand;
- Leveraging the global footprint of the combined companies to generate demand and increase vacation and destination options for the guests of both companies;
- Realizing significant synergies related to global market access, supply chain, purchasing power and other economies of scale.
Lefebvre said he is confident that the significant investment stake he is retaining will sizably increase its value through the growth this long-term partnership will enable.
Lefebvre and Fain also confirmed that Silversea’s CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team.
Silversea’s sterling fleet covers the world sailing to more than 1000 global destinations. The company’s unique luxury expedition vessels add a pioneering ultra-luxury brand to RCL’s industry-leading brand lineup.
RCL’s largest brand, Royal Caribbean International, is a contemporary brand focused on adventure-seeking families, Celebrity Cruises is a premium brand providing a modern luxury experience to discerning global travelers, and Azamara Club Cruises is a destination immersive brand offering luxury voyages to unique ports. The company also operates the regional TUI Cruises and Pullmantur brands as part of long-term joint ventures.
The closing is expected to be completed later in the year, subject to customary closing conditions and regulatory approval.
Some of Silversea’s shining ships
For more about Silversea click www.silversea.com. You can also find many articles about its ships on this blog or at www.cruiseable.com and https://pattipietschmannthecruiseguru.blogspot.com/2018/03/silver-muse-launches-new-chapter-for.html
Royal Caribbean International is a cruise line brand founded in Norway and based in Miami, Florida, United States. It is owned by Royal Caribbean Cruises Ltd.As of May 2018, the line is operating 27 ships, has five additional ships on order, and controls 21.9% of the cruise market worldwide. All ships under the Royal Caribbean International brand have names ending with “of the Seas” (e.g. Freedom of the Seas) a practice which began in 1991.