Princess Snubs Carnival as EU Clears Hostile Bid
Mesure, Susie, The Independent (London, England)
CARNIVAL CORPORATION renewed its calls to urge P&O Princess to meet the US cruise ship giant to discuss its hostile pounds 3.5bn bid for the UK cruise company yesterday after it won regulatory clearance for its proposed deal from the European Union.
But P&O Princess, which hopes to conclude a separate friendly pounds 5.3bn merger with Royal Caribbean that would see it leapfrog Carnival into the world's number one cruise spot, refused on the grounds that its deal with Royal forbids it.
Despite initially expressing concern that a Carnival/P&O tie-up would be anti-competitive in the UK and Germany, Europe's two biggest cruise markets, authorities in Brussels cleared the deal unconditionally. The commission cited the market's strong growth, lack of entry barriers and rivals' ability to re-deploy capacity to justify its decision.
While Royal Caribbean lambasted the change of heart, threatening possible legal action, competition lawyers said last month's move by the UK authorities to clear the Royal/P&O merger left the Commission little choice but to follow suit. Brussels referred to its "fruitful contacts" with its counterparts in the UK and the US, which is also examining both deals.
Frances Murphy, a competition partner at Mayer, Brown, Rowe & Maw, added that the Commission would have been "very sensitive to the risk of another challenge to a high-profile merger decision" in light of the embarrassing ruling from a top European court last month that overturned a previous Brussels regulatory decision. …