LONDON — P&O Princess Cruises PLC is merging with Miami-based Royal Caribbean Ltd. in a deal worth about $3 billion that creates the world's largest cruise ship company in an industry hurt by the Sept. 11 terrorist attacks.
London-based Princess said Tuesday the combined company would have 41 ships and 75,000 berths, topping Miami-based Carnival Cruise Lines.
The British company will own 50.7 percent of the new group, with Royal Caribbean taking 49.3 percent. The combined company, which will be based in Miami, would be worth about $6 billion.
The deal comes at a difficult time for the cruise industry, which was already slumping before the Sept. 11 attacks made it lose millions of dollars more. Fears about traveling have kept many passengers home, and boosting security has been costly.
The companies said the merger should save $100 million within a year even as the new company plans to increase its capacity by more than a third to 105,000 berths by 2005. It has 14 ships on order.
Princess chief executive Peter Ratcliffe said no significant job cuts were expected.
Princess said savings would come from marketing efficiencies, improved purchasing and combined tour operations in Alaska.
Under terms of the deal, an existing Royal Caribbean share will be equivalent to up to 3.46 existing P&O Princess shares. No shareholders will need to tender or exchange their shares, the companies said; once the deal is completed, shareholders will receive distributions of both income and capital based on the ratio.
The merger, subject to shareholder and regulatory approval, is to be completed in the second quarter of 2002.
Richard D. Fain, chairman and chief executive officer of Royal Caribbean, will take the same post with the new group. Ratcliffe will become managing director and chief operating officer.
Princess said 3 million passengers were carried by the two companies in 2000, and aggregate sales for the nine months to Sept. 30, 2001, were more than $5 billion.
Fain said the two groups had been discussing a possible alliance as long ago as 1991 but that the events of Sept. 11 made the move "even more valuable."
Ratcliffe said the industry had suffered since Sept. 11, but he said it had "long-term growth characteristics."
"With a high-quality fleet of over 40 ships, we will have the flexibility to respond to changes in demand around the world," Ratcliffe said.
Princess shares were up 16 percent, in trading on the London Stock Exchange to $5.20, while shares of Royal Caribbean were up $2.36, or 16 percent, to $17.37 on the New York Stock Exchange.
The move comes 13 months after Princess split away from Peninsular and Oriental Steam Navigation Company to become an independent company.
P&O traces its origins to the 1840s in Britain. In 1999, it acquired a majority stake in the German cruise line AIDA, and acquired full control of AIDA and Seetours the following year.