MIAMI - Carnival Corp., the world's largest cruise operator, said Sunday that its $4.5 billion offer to merge with P&O Princess Cruises PLC has been rejected by the London-based company.
"We believe that our proposal is in the best interest of P&O Princess Cruises' shareholders," Carnival Corp. chairman Micky Arison said in a statement.
But Princess said its board preferred its planned merger deal with Royal Caribbean Ltd. Princess also said a merger with Carnival would be "subject to greater regulatory risk in the United States and the European Union."
"We made it clear on announcing the Royal Caribbean combination that we were creating a truly formidable company that would go from strength to strength," said Lord Sterling of Plaistow, Princess' chairman in a statement. "Our response to Carnival simply recognizes that their proposition will not deliver the same value for our shareholders."
Princess and Royal Caribbean announced merger plans in November. The combined company, tentatively named RCP Cruise Lines, would have 75,000 berths on 41 ships, allowing it to surpass Carnival as the world's largest cruise operator.
Royal Caribbean is oriented toward Caribbean travel while Princess offers routes in Europe, Australia and Alaska.
The merger, subject to shareholder and regulatory approval, is to be completed in the second quarter of 2002.