Royal Caribbean Cruises (RCL) is to acquire a majority stake in privately-owned Silversea Cruises,
Under the agreement, RCL will acquire a 66.7% equity stake in Silversea Cruises based on an enterprise value of around $2 bill. The purchase price of the equity being acquired is around $1 bill.
RCL said that it planned to finance the purchase through debt.
“Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth,” said Richard Fain, RCL Chairman and CEO. “Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas.”
“We are proud to welcome aboard Manfredi Lefebvre, a visionary leader whose high standards and history of innovation we deeply respect. Manfredi will remain Executive Chairman of Silversea, continuing to lead its strategy long term,” he said.
“This partnership will bolster the growth of this exceptional brand founded by my father,” explained Lefebvre. “I have always been kindred spirits with Richard and we share a vision of offering excellence and leadership to our guests. This new partnership gives Silversea the opportunity to accelerate the growth of the most successful luxury and expedition cruising brand in the world.”
The strategic rationale for the partnership includes:
Driving long-term capacity growth in the burgeoning luxury and expedition markets at a much larger scale than what Silversea would achieve independently.
Diversifying Royal Caribbean’s portfolio and increasing its expedition offerings by adding a premiere ultra-luxury brand.
Leveraging the global footprint of the combined companies to generate demand and increase vacation and destination options for the guests of both companies.
Realising significant synergies related to global market access, supply chain, purchasing power and other economies of scale.
Lefebvre said he is confident that the significant investment stake he is retaining will sizeably increase its value through the growth this long-term partnership will produce.
Lefebvre and Fain both confirmed that Silversea’s CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team.
The closing is expected to be completed later in the year, subject to customary closing conditions and regulatory approvals.
Perella Weinberg Partners served as financial advisor to RCL and Skadden, Arps, Slate, Meagher & Flom provided legal counsel. Barclays PLC served as financial advisor to Manfredi Lefebvre and Morgan, Lewis & Bockius provided legal counsel.