Royal Caribbean to Buy 67 Percent Stake in Ultra-Luxury Silversea Cruises

A dynamic, synergistic partnership is joining the cruise industry as Royal Caribbean Cruises Ltd announced that it is purchasing a majority stake in the ultra-luxury line Silversea Cruises.

Under the new partnership, RCL will buy a 66.7 percent equity stake in Silversea for about $1 billion, based on the Monaco-based cruiseline’s enterprise value of some $2 billion.

“Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth,” said Richard D. Fain, RCL’s chairman and CEO. “Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas.”

Manfredi Lefebvre, Silversea executive chairman, will remain in that role and continue to lead the company’s long-term strategy. Fain described Lefebvre as “a visionary leader whose high standards and history of innovation we deeply respect.”

His father Antonio Lefebvre d’Ovidio – a respected Italian jurist and maritime law professor – founded the Silversea brand in the early 1990s. Lefebvre said he is confident that the significant stake he’s retaining will greatly increase in value through the growth this long-term partnership RCL will enable.

He’ll qualify for an estimated contingent consideration of about 472,000 RCL shares, payable upon reaching certain 2019-2020 performance metrics.

“I have always been kindred spirits with Richard and we share a vision of offering excellence and leadership to our guests,” Lefebvre said. “This new partnership gives Silversea the opportunity to accelerate the growth of the most successful luxury and expedition cruising brand in the world.”

RCL plans to finance the purchase through debt. The strategic rationale for the partnership includes driving long-term capacity growth in the booming luxury and expedition segments at a much larger scale than Silversea would achieve alone; diversifying RCL’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 their guests; and realizing significant synergies related to global market access, supply chain, purchasing power and other economies of scale.

Silversea CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team, Lefebvre and Fain said.

The deal will add to an RCL stable that includes its largest brand, Royal Caribbean International, a contemporary brand focused on adventure-seeking families; Celebrity Cruises, a premium brand providing a modern luxury experience to discerning global travelers; and Azamara Club Cruises, a destination-immersive brand offering luxury voyages to unique ports. The company also operates the regional TUI Cruises and Pullmantur brands as part of long-term joint ventures.

As a pioneering ultra-luxury brand, Silversea offers intimate, all-suite ships sailing to more than 1,000 global destinations, as well as unique luxury expedition vessels exploring secluded harbors not accessible to larger cruise ships.

The deal is expected to be finalized later this year, subject to customary closing conditions and regulatory approvals.

[Source: ROYAL CARIBBEAN CRUISES LTD. ]

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