Top cruise operator Carnival Corp. said Thursday it plans to form a joint venture in Spain, following the lead of rival Royal Caribbean Cruises Ltd. in expanding in the fast growing Spanish vacation market.
Carnival and Royal Caribbean, the world’s two biggest cruise companies, are looking to grow in Europe with the Caribbean market suffering from weaker pricing after recent hurricane damage and expanded port capacity in the region.
Carnival, the No. 1 cruise operator, signed a letter of intent to form a joint venture with a unit of Spanish travel firm Orizonia Corporacion. The venture will operate and expand Orizonia’s Iberojet Cruceros cruise brand in Spain.
Carnival, which already operates in Spain through its Costa Cruises unit, will own 75 percent of the joint venture and Orizonia’s Iberojet unit will own 25 percent.
Miami-based Carnival will contribute about 105 million euros (roughly $136 million) to the joint venture, company spokesman Tim Gallagher said.
Carnival, which in December announced plans for a joint venture geared to German-speaking vacationers, hopes its Spanish venture gives it more breadth in the Spanish cruise market. Iberojet Cruceros caters to mass-market vacationers, while Carnival’s Costa unit is more upscale, said Gallagher.
The new joint venture will operate Iberojet Cruceros’ two existing ships, with plans to expand over the next several years by acquiring ships from Carnival’s current fleet.
Iberojet Cruceros’ two cruise ships are the 834-passenger Grand Voyager, built in 2000, and the 1,196-passenger Grand Mistral, constructed in 1999, Carnival said.
Carnival expects the transaction to be neutral to earnings in the first 12 months after closing. The deal is expected to close in the second quarter.
In November, Royal Caribbean bought Madrid-based cruise operator Pullmantur for 430 million euros (about $559 million) in cash.
