"The combination of three distinct brands, each serving a different market segment, under one umbrella immediately creates an industry-leading cruise operator with an unmatched growth trajectory and a portfolio of products that allows us to appeal to guests at every stage of their life cycle. We are fully committed to retaining the brand propositions, guest experiences and cultures of the Norwegian, Oceania and Regent brands that have allowed each to realize such success." ~Kevin Sheehan, Norwegian Cruise Line's CEO
Wednesday, September 3, 2014
Norwegian Oceania and Regent to Wed
Norwegian Announces Marriage With
Norwegian Cruise Line published a press release on Tuesday announcing that it has entered into a definitive agreement to acquire Prestige Cruises International, Inc, parent company of Oceania Cruises and Regent Seven Seas Cruises, in cash and stock for a total transaction consideration of $3.025 billion, including the assumption of debt.
Following the announcement, they also had several meetings with investors, media, and their travel partners to discuss the transaction in further detail. What does this mean to you as a cruise enthusiast?
It is important to note that both company's senior management forged relationships during the courtship, prior to this transaction being entered, and sought to understand the philosophies that drove each individual company. As stated by Norwegian's CEO, Kevin Sheehan, these distinct brands serve different market segments and have loyal followings. It is critical that the brand cultures don't change and that guest experiences are preserved.
The actual consummation of the deal will not occur until some time later this year, most likely in Q4 2014. Until then, customers and travel partners should expect "business as usual". If you are really interested, all the legal-ESE can be found in the actual press release.
In the industry briefing, it was clear that both companies had taken this merger seriously and done their due diligence. This was "day one" and too early to answer many questions that were lurking in people's minds, but assurances were given that in due time there would be answers.
After the deal becomes official, there may be some changes as one might expect. Indications were that both companies have some best practices and that the intention was to learn from each other. Prestige for example has already merged two companies, Regent and Oceania, so some of those past experiences will come in handy with this new entity. Customers and travel partners should benefit in the long run from the merger.
There is a definite life-cycle that cruise guests follow. Using these three brands as an example customers going on their first cruises would typically start out on Norwegian. As they mature and have families, Norwegian would still most likely be a fit. As the kids get older, couples may want to cruise on their own and have a more upscale experience. Oceania could be the cruise line of choice for those guests. Later in life, Regent, with their all-inclusive experience, might become the preferred cruise line. There should not be a need to go outside this new family of cruise lines to meet goals of any specific cruise vacation. (There could be exceptions to that, such as river cruising).
There were questions about the loyalty programs as you might expect. It is too early to determine what changes, if any would be made. As travel partners and guests, the hope is that loyalty will be rewarded, while still preserving the individual benefits for the given brand within the family of brands.
This deal has a life-cycle as well, and all we can do is wait and see. We've been invited to the wedding feast and anxiously await the day of the event. We all wish the partners well in their new journey together. After all, it is in everyone's interest that this new "marriage" live long and be prosperous. We expect more announcements in the months ahead and we will bring you updates as appropriate.
Congratulations to the entire Norwegian and Prestige Cruises family - we wish you well.