Carnival Corp. (CCL) is a global cruise line. It operates as a dual-listed company with Carnival Plc (CCL.L), but the two separate legal entities function as a single economic entity through contractual agreements. Shares of CCL are traded on the New York Stock Exchange (NYSE) while shares of CCL.L are traded on the London Stock Exchange (LSE). The company offers cruise vacations through a range of brands that operate in various geographic locations throughout North America, Europe, and Australia. Its brands cater to different price points, lifestyles and cultures as well as entertainment and vacation preferences. Carnival posted a net loss of $10.2 billion on revenue of $5.6 billion in fiscal year (FY) 2020, which ended Nov. 30, 2020. The market cap of CCL was $27.4 billion and that of CCL.L was GBP18.8 billion ($25.2 billion), as of Nov. 10, 2021.
Carnival's leading brand is Carnival Cruise Line, which was founded in 1972 by entrepreneur Ted Arison. Carnival Cruise Line was initially formed as part of a subsidiary of American International Travel Service (AITS). The company started out with a single used trans-Atlantic ocean liner that it converted into a cruise liner and renamed the Mardi Gras. In 1974, Arison purchased Carnival Cruise Line for $1 and the assumption of AITS' debt of $5 million. At that point, the cruise line was still a small-time operator struggling to survive. But it managed to steadily grow in size and popularity, and went public in 1987 through an initial public offering (IPO). The cash raised in the IPO provided the company with the capital needed to continue expanding through acquisitions. The company, which was renamed Carnival Corp. in the early 1990s, has since built a portfolio of globally-recognized cruise brands. Below, we look in more detail at five of those brands.
Holland America Line N.V.
- Type of Business: Cruise Line
- Acquisition Price: $625 million
- Acquisition Date: November 1988 (announced)
Holland America Line traces its origins to the founding of a shipping and passenger line called Netherlands-American Steamship Co. in 1873. In the first 25 years since its founding, the company owned a fleet of six cargo and passenger ships that it operated between Holland and the Dutch East Indies. The company would become known over time as the Holland America Line due to its being headquartered in the Dutch city of Rotterdam. In 1989, Carnival Cruise Line formally acquired the company, reinforcing its position as the largest cruise line in terms of the number of passengers. The Holland America Line now operates a fleet of 10 ships cruising to over 425 ports in more than 100 countries.
Seabourn Cruise Line Ltd.
- Type of Business: Ultra-Luxury Cruise Line
- Acquisition Price: $15 million (initial 25% stake ); $10 million (additional 25% stake); unknown amount (remaining 50% stake in 1998)
- Acquisition Date: 1992 (25% stake); 1995-1996 (25% stake); 1998-1999 (remaining 50% stake)
Seabourn Cruise Line was founded in 1988 with the launch of the 208-passenger Seabourn Pride. The idea for the cruise line originated two years earlier among a small group of luxury hospitality and cruising executives looking to reinvent luxury cruising. When the Seabourn Pride was first launched, it offered: spacious all-suite accommodations; public spaces designed for relaxed socializing; and a stern designed like a private beach resort. Just four years later in 1992, Carnival agreed to purchase a 50% stake in Seabourn via two separate ten-year loans of $15 million and $10 million. With the $15 million loan Carnival acquired an initial 25% stake in Seabourn. The second loan for $10 million secured an additional 25% stake in late 1995. In 1998, the company purchased the remaining 50% stake in Seabourn. At the same time, Carnival acquired Cunard Line Ltd. and combined it with Seabourn. Today, Seabourn operates a fleet of three 458-passenger and two 600-passenger ships offering an ultra-luxury cruising experience in over 400 destinations globally.
- Type of Business: Cruise Line
- Acquisition Price: approx. $141 million (for initial 50% stake), part of $270 million joint purchase price with Airtours Plc; approx. $515 million (remaining stake)
- Acquisition Date: 1997 (initial 50% stake); 2000 (remaining stake)
Costa made its first voyage from Genoa to Buenos Aires in 1948 with a trans-Atlantic liner named the "Anna C". By the 1960s, the Italy-based company was Europe's largest cruise line. Costa was jointly acquired in 1997 by Carnival and Airtours, each of the two companies purchasing a respective 50% stake. Three years later, Carnival purchased the remaining stake in Costa from Airtours for approximately $515 million. The acquisition of Costa bolstered Carnival's presence in the fast-growing European market. Costa is now the parent company of both Costa Cruise Lines and AIDA Cruises. Today, Costa operates a fleet of 10 ships and visits over 260 ports around the world. AIDA leads the German-speaking cruise market and currently operates a fleet of 14 cruise ships.
Cunard Line Ltd.
- Type of Business: Luxury Cruise Line
- Acquisition Price: $500 million (initial 68% stake); $205 million (remaining stake)
- Acquisition Date: 1998 (initial 68% stake); 1999 (remaining 32% stake)
The Cunard Line was founded in 1840 by war veteran and timber merchant Samuel Cunard. It started out providing mail service in Canada's maritime region before eventually expanding its services across the Atlantic and establishing itself as an international shipping company. During the 1880s, Cunard transported more than one million of the 2.5 million people seeking to settle in the U.S. The company continued to grow and expand over the next century. Cunard was operating five luxury cruise ships by 1998, the year Carnival and a group of investors purchased its operating assets for $500 million. Carnival acquired a 68% interest in the cruise line and consolidated it with Seabourn, of which the company had simultaneously purchased the remaining stake. In 1999, Carnival purchased the remaining 32% stake in Cunard in a deal worth $205 million. The purchase of Cunard, the largest luxury cruise operator in the world at the time, made Carnival the largest cruise company in the world. Cunard currently operates three luxury cruise vessels.
- Type of Business: Cruise Line
- Acquisition Price: approx. $7.3-$7.8 billion
- Acquisition Date: April 2003
P&O Cruises was founded in 1837 as the Peninsular & Oriental Steam Navigation Co. While the company started out primarily transporting mail, it went on to offer its first leisure cruise from London to the Mediterranean in 1844. Cruising would gradually grow in popularity and become a more regular activity by the mid-1880s. In 2003, the company's cruise operations, known as P&O Princess Cruises Plc, were acquired by Carnival for between $7-$8 billion. The acquisition included Princess Cruises, P&O Cruises, P&O Cruises Australia, and tour operator Princess Tours. The merger between the two companies led to the formation of the dual-listed company – Carnival Corp. and Carnival Plc – discussed in the introduction above. It made Carnival into the first global cruise company. Today, Carnival operates P&O as two separate brands: P&O Cruises (U.K.), which operates a fleet of five premium ships; and P&O Cruises (Australia), which operates a fleet of three ships.