2 cruise lines to pursue Princess purchase

By David Ho
Associated Press

WASHINGTON — Federal regulators said yesterday that Carnival Corp. and Royal Caribbean Cruises LTD can pursue their competing bids to buy P&O Princess Cruises PLC.

The Federal Trade Commission voted 3-2 to close its antitrust investigations of the two proposed deals.

"The proposed transactions will not adversely affect consumers," the FTC said. The agency said that after either deal, there would still be two large competitors and many other smaller cruise companies.

Peter Ratcliffe, chief executive of P&O Princess, said in a statement that while the company still favors a deal with Royal Caribbean, it will begin negotiations with Carnival now that the last regulatory hurdle has been cleared.

Jennifer de la Cruz, a spokeswoman for Carnival, said the company is "very pleased with the FTC decision."

Royal Caribbean did not immediately return calls seeking comment yesterday.

Two FTC commissioners — Sheila Anthony and Mozelle Thompson — voted against allowing the proposed deals. "There is a substantial likelihood that either merger will significantly lessen competition," the two commissioners said in a statement.

In June, European regulators cleared Carnival's $5.5 billion bid and Royal Caribbean's $3.7 billion offer.

Carnival and Royal Caribbean, both based in Miami, are Nos. 1 and 2 in the cruise market. London-based P&O Princess is No. 3.

Royal Caribbean agreed to merge with P&O Princess in November. Carnival's offer came a month later.

Royal Caribbean has 23 ships and an estimated 22 percent share of the global market. Princess has 18 ships and a 13 percent market share.

Carnival's 43 ships give it a 27 percent share of the estimated global market for 2002.

Business for all three companies foundered after the Sept. 11 terrorist attacks, and each is determined to cut costs.