P&O Princess and Royal Caribbean create $6bn alliance

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P&O Princess Cruises and Royal Caribbean Cruises have announced a merger worth $6bn, which will create the world's largest cruise operator.

Royal Caribbean ceo Richard Fain said the companies had been talking about such a move for months, but denied that the events of September 11, which hit the cruise industry hard, had prompted the final step.

P&O Princess ceo Peter Ratcliffe said the merger would help save costs of up to $100m within the first year.

As part of the merger deal P&O Princess would have 50.7% of the equity of the group, with Royal Caribbean taking the remaining share. If the merger goes through, it should be completed by the second quarter of 2002.

Starboard Cruise Services, managed by DFS Group, already operates the duty-free concessions onboard Royal Caribbean and could play a leading role in the combined group's onboard retailing efforts.