FILE - In a Dec. 1, 2013 aerial file photo, the cruise ship Norwegian Breakaway is berthed on the westside of Manhattan in New York. Norwegian Cruise Line is getting into the luxury cruise business by acquiring Prestige Cruises International in a deal worth about $3 billion. Shares of Norwegian jumped more than 14 percent before the opening bell Tuesday, Sept. 2, 2014. (AP Photo/Mark Lennihan)
Republished September 02, 2014 - 1:52 PM
Original Publication Date September 02, 2014 - 5:40 AM
NEW YORK, N.Y. - Norwegian Cruise Line is sailing into the luxury sector by buying the high-end Prestige Cruises International in a deal valued at about $3 billion, including debt.
The deal will give Norwegian access to Prestige's eight ships on the Oceania and Regent Seven Seas cruise lines and its big-ticket vacation packages. Norwegian, which owns 13 ships, is known for its "Freestyle Cruising" that lets travellers choose where they want to eat and at what time.
Buying Prestige will help Norwegian be more competitive with its larger rivals: Carnival Corp. owns luxury cruise lines Cunard and Princess, while Royal Caribbean Cruises Ltd. owns Celebrity Cruises.
Norwegian, which is based in Miami, values the cash-and-stock deal at $3.03 billion when debt is included. The company declined to specify how much debt it would be taking on. Shareholders including private equity firm Apollo Global Management LLC, Prestige's majority owner, could get another $50 million in cash if certain performance targets are reached.
Apollo also owns about 20 per cent of Norwegian, whose shares rose 11 per cent Tuesday.
The two other big Norwegian shareholders, Genting Hong Kong Ltd. and TPG Capital, have already signed off on the deal. It's expected to close in the fourth quarter.
Shares of Norwegian Cruise Line Holdings Ltd. rose $3.68 to close at $36.99 Tuesday.
News from © The Associated Press, 2014