PHOTO: The deal is done. Frank Del Rio, left, and Kevin Sheehan are shown in a file photo released when the purchase was announced on Sept. 2. (Courtesy of Norwegian Cruise Line)
Norwegian Cruise Line Holdings Ltd. on Nov. 19 has completed its purchase of Prestige Cruises International Inc., parent company of Oceania Cruises and Regent Seven Seas Cruises. The $3.025 billion transaction in cash and stock included the assumption of debt.
The acquisition catapults NCLH into the upper-premium and luxury cruise segments with two well-established and successful brands in addition to its original contemporary brand, Norwegian Cruise Line. The move also lets NCLH compete more successfully against its massive competitors, Carnival Corp. and Royal Caribbean Cruises Ltd., which offer a portfolio of brands spanning the market segments.
"While for years we have competed successfully with our one brand in an increasingly consolidated industry, our acquisition of Prestige creates a new cruise operator with a range of complementary offerings as diversified as any in the industry," said Kevin Sheehan, president and CEO of NCLH. "We now shift our focus from planning for the successful integration of these organizations to the implementation phase, with an organizational structure that allows for the realization of significant synergies while maintaining the integrity of the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands that have made each a success in their respective segment."
The combined cruise company now operates 21 ships with approximately 40,000 lower berths visiting more than 430 destinations worldwide. Five new ships are on order for delivery through 2019. Sheehan has said that synergies and sharing best practices will save the new company at least $25 million.
Under the new organization, Sheehan will head NCLH, the parent company, and Prestige CEO Frank Del Rio, who co-founded Oceania in 2002, will remain in that position at least through 2015, he said previously. Kunal S. Kamlani will remain president and COO.
With Sheehan's expanded duties, Norwegian Cruise Line hired a chain restaurant executive, Drew Madsen, to serve as president and COO of that brand.
The acquisition has received mostly positive reaction from the travel agent community. "This is a positive sign for the cruise industry and demonstrates Norwegian's commitment to the cruise industry," said Debbie Fiorino, senior vice president of CruiseOne and Cruises Inc. "This partnership will enable agents to expand into new markets and I'm sure will provide new innovative experiences in the future."
But, agents said they hope that Oceania and Regent will keep their own unique personalities and positions in the marketplace. Sheehan and Del Rio vowed to keep the brand positioning. "We are committed to maintaining three distinct brands and this will flow into all of our operations," they wrote in a letter to travel agents after the deal was announced.
"We're excited to officially join the Norwegian family and ready to begin this next chapter as one united company," Del Rio said. "Together, we will further our brands' position as leaders in the upper-premium and luxury cruise markets by continuing to deliver an exceptional onboard experience for our guests, and expand the reach of both Oceania Cruises and Regent Seven Seas Cruises throughout the world."
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