I got the following information dated June 25 from an email that Cruise News Daily sent me for their headlines:
* Feature Story:
The UK Competitive Commission approved the RCCL/P&O-
Princess merger proposal, but it doesn't automatically
mean that merger will happen. The decision is also good
news for rival suitor Carnival Corp.
This approval is not all the only approval needed for
the Royal Caribbean offer. The big hurdle to still clear
is in the US. Without approval of all the governments,
nothing goes forward.
It's also important to realize that just because Royal
Caribbean got a thumbs-up, it doesn't mean that Carnival
got a thumbs-down. Quite the contrary; it could be a very
good sign for Carnival.
Carnival, all along, has said that they felt that
either both their proposal and Royal Caribbean's would
both be approved or both be denied by the regulators.
They said they feel it hinges on if the regulators look
at the vacation industry as a whole (merged cruise
companies would control a very small percentage of that
market) or if the regulators look at only the cruise
industry (where merged companies would control a larger
In the statement last week by UK regulators, they said
that they approved the Royal Caribbean proposal based on
the view of the small amount of the entire vacation
market the merged companies would control.
For technical legal reasons, Carnival's proposal is
being reviewed by the EU commission, while Royal
Caribbean's was reviewed by the UK and Germany. The
German trade commission previously gave the green light
to the Royal Caribbean proposal. Carnival is still
awaiting action by EU commission. In a conference call
today, P&O Princess' Peter Ratcliffe said that it would
be unusual for UK and EU regulators to define the market
differently (meaning that since the UK is looking at the
whole vacation industry, rather than just the cruise
industry, the EU will likely be looking at the Carnival
proposal in the same way).
Add to it that Carnival has been very open about being
willing to divest any of its holdings (including P&O
cruises) that the EU would require to approve the
proposal - except Cunard Line, therefore Carnival
management feels approval can be negotiated.
Ratcliffe says that P&O Princess attention now turns
to gaining a favorable decision in the US. Decisions by
US regulators are expected this fall.
If both proposals are ultimately approved by all the
governments, it will put things right back where they
were at the beginning of the year. Then the decision will
ultimately be back in the hands of the P&O Princess
shareholders to decide. When we last left that
cliffhanger, they had defied the board of directors'
recommendation to approve the Royal Caribbean proposal
(which still would have needed all the governments'
approvals), and put everything on hold to see if both
(Carnival's and RCCL's) proposals would gain the
regulatory approvals and if they actually did have a
The board of directors was telling them that the Royal
Caribbean proposal was the better offer, but the
shareholders obviously saw that Carnival had something
very worthwhile to offer them, so they went against the
board's recommendation and tabled any action on the RCCL
proposal, despite (now apparently empty) threats by RCCL
that if they didn't approve the merger at that time, RCCL
would withdraw the offer. The P&O Princess shareholders
will still apparently be interested in what Carnival has
to say once everything gets approved.
Despite how some of the media is making it look,
Wednesday's ruling by the UK is only one step in this