Exclusive: Norwegian Cruise nears $3 billion Prestige Cruises deal - sources

Sun Aug 31, 2014 3:25pm EDT
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By Soyoung Kim and Greg Roumeliotis

(Reuters) - Norwegian Cruise Line Holdings Ltd NCHL.O, the world's third largest cruise operator, is in advanced talks to acquire peer Prestige Cruises International Inc for around $3 billion, according to people familiar with the matter.

A deal would give Norwegian Cruise, a company with a market value of $6.8 billion, access to Prestige Cruises' luxury cruise ships and affluent clientele as it competes with bigger rivals Royal Caribbean Cruises Ltd (RCL.N: Quote) and Carnival Corp (CCL.N: Quote).

An agreement may be announced as early as this week, the sources said on Sunday, cautioning that the talks could still fall apart. The owner of Prestige Cruises, private equity firm Apollo Global Management LLC (APO.N: Quote), also owns a 20 percent stake in Norwegian Cruise.

The sources asked not to be identified because the negotiations are not public. Norwegian Cruise and Prestige Cruises representatives did not respond to requests for comment, while an Apollo spokesman declined to comment.

Miami-based Norwegian Cruise operates 13 cruise ships in routes spanning North America, the Mediterranean, the Baltic, Central America and the Caribbean. It had revenues of $2.57 billion in 2013, up 13 percent from 2012.

Prestige Cruises, also based in Miami, operates under the Oceania and Regent brands, which together have eight cruise ships traveling to Scandinavia, Russia, the Mediterranean, North America, Asia, Africa and South America. It posted revenues of $1.2 billion in 2013, up 6 percent from the year earlier.

The $29 billion cruise industry is expected to benefit in the coming years from the rise of the middle class in emerging economies such as China and India. Companies are racing to position themselves as the cruise operators of choice for these new customers.

Prestige Cruises registered with U.S. regulators for an initial public offering in January 2014. Apollo has been the company's majority shareholder following an $850 million deal in 2007.   Continued...

Norwegian Cruise Line CEO Kevin Sheehan gives an interview following his company's IPO at the Nasdaq Market site in New York, January 18, 2013.   REUTERS/Brendan McDermid