P&O Princess Cruises agrees to join with Carnival

<br>LONDON (AP) _ Cruise ship company P&O Princess said Wednesday it will join with the world's leader, Carnival Corp., to create a cruise company unrivaled in size, with 65 ships and nearly 100,000

Wednesday, January 8th 2003, 12:00 am

By: News On 6

LONDON (AP) _ Cruise ship company P&O Princess said Wednesday it will join with the world's leader, Carnival Corp., to create a cruise company unrivaled in size, with 65 ships and nearly 100,000 berths.

Miami-based Carnival and London-based P&O Princess, the third-largest cruise company, said they would unite under a formula that allows them to combine management and operations while retaining their separate legal identities.

As part of the ``dual listed company'' structure, P&O Princess intends to change its name to Carnival (UK) PLC, the company said in a statement.

P&O Princess said its board would recommend the transaction to shareholders at a special meeting near the end of March.

``We believe that the combination with Carnival, which will create one of the world's leading cruise vacation groups, is an exciting opportunity for our shareholders and employees,'' said Peter Ratcliffe, chief executive of P&O Princess, who will become an executive director of both companies.

Ratcliffe said he was optimistic that the cost savings stemming from the merger would exceed the initially estimated $100 million.

The combined group, which will have headquarters in Miami with a corporate office in London, expects to operate a fleet of 65 cruise ships offering 99,964 lower berths, with 18 additional cruise ships with 42,260 lower berths scheduled to be added over the next three and a half years.

Micky Arison, the chairman and chief executive of Carnival, will take on those roles at both companies, as will his vice chairman and chief operating officer Howard Frank.

P&O Princess spent much of the past year fighting off Carnival's approaches after agreeing to a ``merger of equals'' with rival U.S. cruise company, Royal Caribbean Cruises Ltd.

But in October, P&O Princess decided Carnival's $5.4 billion takeover offer was ``financially superior'' and that it was withdrawing support for the Royal Caribbean deal.

P&O Princess and Carnival together carried 4.7 million passengers in the year ended Nov. 30, 2002.

Existing P&O Princess shareholders will hold 26 percent of the equity of the combined group, and existing Carnival shareholders will hold 74 percent.