Asset Sale?

Carnival Corporation has said that it is prepared to consider disposing of P&O Cruises UK should it prove necessary to obtain regulatory clearance to acquire P&O Princess Cruises.

Carnival said it was not prepared to dispose of Cunard Line, however.

Both the four-ship P&O Cruises brand and the two-ship Cunard fleet target the U.K. market. While P&O is set to grow by transferring ships from sister company Princess Cruises, Cunard is building two new ships.

But neither brand may be an easy sell. P&O Cruises is profitable as part of the larger P&O Princess group but may be less so as an independent company. Cunard, on the other hand, is not profitable while it also has a $1.2 billion investment (debt) in newbuildings.

A different scenario may include the sale of P&O Princess to Carnival while P&O Cruises returns to the fold of P&O, reversing the spin-off of two years ago, allowing its owners to cash in on its North American, Australian and German cruise interests while continuing to operate in the U.K.

Carnival, meanwhile, sought to downplay the possible market dominance it would have if it owned both P&O Cruises and Cunard, by stating that P&O Cruises operates in the contemporary market segment while Cunard is a premium and luxury operator.

According to Cruise Industry News (CIN), however, both companies operate in the so-called premium segment of the British market.

Meanwhile, the European Commissions is believed to be concerned with competition problems in the various European national cruise markets.

According to CIN estimates, if Carnival acquires P&O Princess, it will become the largest cruise company in the U. K., Germany and Italy and probably in France and Spain as well, based on available passenger capacity.  

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