PHOTO: Norwegian's newest ship, the Norwegian Getaway. (Courtesy of Norwegian Cruise Line)
It's official: Norwegian Cruise Line Holdings Ltd. is buying Prestige Cruises International, parent company of Oceania Cruises and Regent Seven Seas Cruises, for $3.025 billion. The companies announced the definitive agreement on Sept. 2, and the deal is expected to close in the fourth quarter.
"To me, there has never been a better marriage," Norwegian CEO Kevin Sheehan said in a conference call with financial analysts. "We are going to be a success story unprecedented, not only in this industry, but in corporate America."
Norwegian is a contemporary cruise line aimed at multi-generational families, while Oceania is an upper-premium product and Regent a luxury, all-inclusive vacation. The combined company will offer a "portfolio of products that appeal to guests at every stage of their life cycle," Sheehan said.
Prestige CEO Frank Del Rio, who co-founded Oceania "on my kitchen table" in 2002, will remain in that position at least through 2015, he said in the call.
Sheehan emphasized that he is "strongly, strongly committed" to keeping each brand distinct and independent, although synergies and sharing best practices could save up to $25 million in areas such as purchasing and procurement, energy consumption, maintenance contracts and dry-docks, global port contracts, crew recruitment and such. However, the nuts-and-bolts will remain "behind the proverbial curtain and will be invisible to our guests," Sheehan said.
Prestige is primarily owned by Apollo Management, which also owns about 23 percent of Norwegian, which went public in January 2013. Prestige was formed in 2007 to manage select assets in Apollo Management's cruise investment portfolio. The company is run by Del Rio and Kunal S. Kamlani, who is president and COO.
"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 allows us to appeal to guests at every stage of their life cycle," Sheehan said in a press release. "We are fully committed to retaining the brand propositions, guest experiences and cultures of the Norwegian, Oceania and Regent brands that have allowed each to realize such success."
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