Cruise players consolidate

In a world where position counts, NCL has always said it was the fourth largest. Now it looks to become equal third, but not of its choosing.

Cruise lines love their branding ? its all part of the necessary marketing to have a good image. To the ordinary guest, as the cruise lines love to call passengers, that impression may be sufficient. However, brand names disguise the steady consolidation within the cruise market and Star Cruises is now virtually certain to acquire NCL.

By the middle of last year NCL looked to be in a position of strength, but things began to unravel in December. Shortly before Christmas Carnival Corp announced a hostile bid for NCL. The initial offer was considered to be well priced, and Carnival had good reason to feel that it would add another brand to its already large collection.

Indeed speaking on Cunard?s re-named Caronia in Liverpool on December 10, Micky Arison, Carnival?s chairman and chief executive officer, was full of confidence. When he was asked about the possibility of Star Cruises intervening, he commented that he felt this to be unlikely. In his view Star would be unable to raise the capital.

But he was wrong.

Within a week Star had announced that it was to buy a limited amount of NCL. It had all the hallmarks of a spoiler deal in which NCL would surrender a degree of autonomy in order to remain independent. Star, it was said, would only hold 30 per cent of NCL shares. Above this amount, under Norwegian law, a full scale bid has to be announced.

It seemed a suitable solution from NCL?s perspective, and soon after Carnival announced it was dropping its offer.

However, since then the battle has been between Star and NCL and by mid-January Star was sufficiently confident of winning total control ? at that point it held to nearly 50 per cent of the stock ? to announce that Colin Veitch would join the board of Star Cruises. It added that it planned to appoint Mr Veitch president and ceo of NCL once the current take-over procedures have been completed.