For Examiner.Com | Just when you think perhaps the cruise lines might be feeling a bit of the pressure, and not performing as well as they would like, a transaction such as this takes place that puts Norwegian Cruise Lines in a very nice position moving into 2015. Confirmed as of September 2, 2014, Norwegian will buy Prestige Cruise Holdings from Apollo Global Management. Total fee for this transaction is estimated at $3 billion.
Currently Norwegian is regarded as the third largest of the major cruise lines, but with this transaction, the fleet now grows to over 20 ships. Prestige Cruises operates a total of eight ships with their upper-premium operator being Oceania Cruises, and their luxury cruise operator being Regent Seven Seas Cruises. Norwegian currently operates 13 ships, so with the new acquired eight ships, the “new” operator is more than 20 strong. Additionally, Norwegian currently has four more ships ordered that are to be delivered over the next few years by Meyer Werft.
According to Norwegian Cruise Lines’ official announcement, the rationale behind this transaction can be summarized to include:
- The diversification of cruise market segments by adding upper premium and luxury brands;
- The further enhancement of industry-leading financial metrics;
- Opportunities for synergies and the sharing of best practices among brands;
- An increase in economies of scale providing greater operational leverage;
- The expansion of growth trajectory and global footprint; and
- The opportunity to complement Norwegian’s new build program with the existing Regent order that provides measured, orderly capacity growth through 2019.
“The combination of three distinct brands, each serving a different market segment, under one umbrella immediately creates an industry-leading cruise operator with an unmatched growth trajectory and a portfolio of products that allow us to appeal to guests at every stage of their life cycle,” said NCL chief executive Kevin Sheehan. “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.”