Which Cruise Deal Will Steam by the FTC?

Now that the European Commission has greenlighted Carnival Corp.’s $6.4 billion hostile bid for fellow cruise ship operator P&O Princess plc, the antitrust ball resides solely in the Federal Trade Commission’s court. Street sources remained divided on how narrowly the FTC would define the companies’ market, therefore allowing one of the cruise ship transactions, which include P&O’s bid for Royal Caribbean Cruises Ltd., or nixing both. When London-based P&O inked its $2.9 billion deal for Royal on Nov. 20, 2001, analysts predicted Carnival would step in, likely within a few weeks. And it did-on Dec. 16, 2001 P&O said it rejected a $4.5 billion, 450 pence-per-share, bid from Carnival. The next day, Carnival made a 456 pence-per-share, $6 billion, offer for P&O. Carnival has upped the bid three times, the last time on Feb. 7 for roughly 550 pence-a-share, or $6.8 billion. Both $15.4 billion market cap Carnival and $3.7 billion market cap Royal are based in Miami. The P&O/Royal transaction is still pending, and the FTC is reviewing all the combination variations.