Admiral on Course; Carnival Outmaneuvered

Anders Wilhelmsen & Co. has outmaneuvered Carnival Cruise Lines in its bid to take over Royal Admiral Cruises and will pay $567 million to buy out its partners, I.M. Skaugen and Gotaas-Larsen.

According to Olav Lunde, Deputy Managing Director of Anders Wilhelmsen, an agreement has been reached with the Pritzker family, owner of the Hyatt and Hyatt International hotel chains, whereby Anders Wilhelmsen will first acquire 100 percent of Royal Admiral and then in turn sell a 50 percent interest to a new company representing the Pritzker family.

In the new constellation, Royal Admiral, the holding company for Royal Caribbean Cruise Line and Admiral Cruises, will be owned and operated on a 50 – 50 basis by Anders Wilhelmsen and by the Pritzker-owned company.

It is expected that the Prizker family will pay more than $250 million for its share and assume some of the company’s debt obligations.

Additional financing of some $325 million has been arranged through the Christiania Bank Og Kreditkasse and the Bank of Nova Scotia.

Lunde also said that the package includes financing for two new sister ships to the Sovereign of the Seas and that negotiations are underway with Alhstom Atlantique and Wartsila Marine Industries. He added that the older tonnage in Admiral Cruise’s fleet may be sold.

According to insiders, Anders Wilhelmsen had little choice but to exercise its right of first refusal and company officials admit that being a minority owner in partnership with Carnival would have been very difficult.

Lunde, however, said that the company also received an offer from Carnival, with that cruise line recognizing that Anders Wilhelmsen could preempt its plans. Sources report that Carnival’s last offer was for $600 million.

Within Anders Wilhelmsen right of first refusal, Carnival cannot bid up the price, and it is expected that the deal will be consumated within 30 days.

Lunde also made it clear that both the cruise and hotel operations hoped to benefit from the association.

It has been reported that Hyatt will make its bookings and reservations system available to the cruise lines, and both sides would gain under joint purchasing agreements.

In addition, both RAC and Hyatt target the upper middle market.

Industry insiders also expect that Richard Fain will continue in his position as Chairman of Royal Admiral although he has reportedly not yet a formal contract to that effect. Fain has, however, said that he would be “overjoyed” if he could stay with Royal Admiral, although under Carnival’s ownership insiders expect that his role would be greatly reduced.

Upon the announcement, the bubbly was reportedly brought out both in Miami and in Oslo and congratulatory greetings arrived from executives at Gotaas-Larsen and I.M. Skaugen.

Royal Admiral claims a 13 to 14 percent share of the North American cruise market and expects 1988 cruise revenues of more than $500 million with net income of about $65 million. Projected net income for 1989 is $90 million.

Under its new ownership structure, Royal Admiral is estimated to have a net worth of some $800 million.

Anders Wilhelmsen & Co. and the Hyatt hotel chains are privately held. Royal Admiral, however, may be poised for a public offering in the not too distant future.

Cruise Industry News Email Alerts

Cruise Industry News Email Alerts



Get the latest breaking cruise newsSign up.


62 Ships | 142,732 Berths | $46.7 Billion | View

New 2024 Drydock REPORT


  • Mkt. Overview
  • Record Year
  • Refit Schedule
  • 120 Pages
  • PDF Download
  • Order Today
New 2024 Annual Report


  • 2033 Industry Outlook 
  • All Operators
  • Easy to Use
  • Instant Access
  • Order Today