For Tapping Into Shared Synergies
In what was 2018’s best kept secret in the cruise industry, Richard Fain, Chairman and CEO, Royal Caribbean Cruises Ltd. (RCL) and Manfredi Lefebvre D’Ovidio suddenly announced that Royal Caribbean Cruises Ltd would buy a 67 percent majority stake in Silversea Cruises. With that $2 billion transaction, RCL immediately added both an ultra-luxury brand and an expedition brand to its portfolio, which also includes contemporary Royal Caribbean International, premium Celebrity Cruises and boutique luxury Azamara Club Cruises.
RCL would have spent years creating its own luxury and expedition brands. Finalized mid-summer, this acquisition saved time and, in one bold step, shepherded personally by Fain, broadened the world’s second largest company’s cruise portfolio, thus creating more vacation options for its loyal customers.
Richard Fain, Chairman and CEO, Royal Caribbean Cruises Ltd.
For Silversea, a privately held family business based in Monte Carlo, Monaco, it allowed the Lefebvre family to retain some ownership yet gave the line the immediate financial clout and shared resources of RCL to foster marketplace growth. That’s already benefitting both companies, as RCL and Silversea announced a new major ship order a short time after the deal was signed. Silversea now has nine vessels, with five more on order.
Lefebvre and Fain have known each other for many years, and now will work closely together to keep the Silversea brand strong and, as loyal Silversea guests hope, differentiated from boutique luxury Azamara, and RCL’s other brands. In addition, the duo will tap into shared synergies such as in purchasing and services. It seems a win-win for both companies and should be interesting to watch over the next few years.