Holiday company TUI said it would receive EUR 700 million (US$ 767 million) from the sale of its unit, Hapag-Lloyd Cruises, to its joint venture (JV) with Royal Caribbean Cruises.
The deal with TUI Cruises, a 50-50 joint venture, values the unit at EUR 1.2 billion and is expected to be completed this summer. About EUR 300 million in additional value will come from synergies, TUI CEO Fritz Joussen revealed, adding Hapag-Lloyd will gain access to the JV’s "international footprint and debt facilities."
Joussen said TUI and Royal Caribbean had developed the JV company "on the basis of a strong partnership over the past 10 years" and the expansion decision was the next big step of growth for them. The proceeds would also help deleverage the balance sheet of TUI.
Hapag-Lloyd Cruises currently has a fleet of 5 ships and had core earnings of EUR 43 million on sales of EUR 305 million for the fiscal year to September 30, 2019.