Carnival Corporation has signed an agreement to acquire the remaining 50 percent of Costa Crociere from Airtours for $525 million.
Carnival and Airtours acquired Costa jointly in 1997 for $275 million – or $137.5 million each.
The 1997 acquisition also included the assumption of approximately $500 million of debt, thus bringing the total value of that deal to approximately $775 million for an estimated per-berth evaluation of Costa of $123,604.
Now Carnival is paying $525 million for half of Costa, which, when 1999 debt of approximately $200 million (the latest figure available) is added in, puts a new per-berth evaluation on the Italian-based cruise line at $134,960.
Carnival’s total investment in Costa will be an estimated $662.5 million. Carnival reported income from Costa Crociere of $40 million for both 1998 and 1999 for its 50 percent interest. Earnings for 2000 are forecasted to be in the same range.
Carnival also holds a 26 percent interest in Airtours.
In a prepared statement, Carnival Chairman Micky Airson said that the “purchase will allow Carnival to further explore and optimize marketing and operating synergies with Costa and to move more quickly to expand Costa’s newbuilding program.” Arisen also told analysts that while the Costa Classica will be stretched, the Romantica will not be stretched contrary to previously announced plans. He also said more acquisitions may be in the pipeline.
According to industry rumors, Carnival is still interested in Princess/P&O, while Costa is said to have made a bid for Festival Cruises, which Festival has denied.