Filing under Rule 425 under
the Securities Act of 1933
and deemed filed under Rule 14d-2
of the Securities Exchange Act of 1934
Filing by: Carnival Corporation
Subject Company: P&O Princess Cruises plc.
SEC File No. of Princess: 001-15136
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
AUSTRALIA, CANADA OR JAPAN
25 January 2002
CARNIVAL CORPORATION
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EUROPEAN ANTITRUST REVIEW PROCESS
o P&O Princess has repeatedly questioned the deliverability of a Carnival/P&O
Princess combination on the grounds of regulatory concerns, most recently
focusing on Europe, but without specifying those concerns in detail.
o Carnival is therefore taking the opportunity to set the record straight and
to clarify its antitrust position in Europe.
o Carnival believes, and has been so advised, that a Carnival/P&O Princess
combination is unlikely to raise regulatory difficulties in the European
Economic Area ("EEA").
P&O Princess, Royal Caribbean and Carnival have all publicly stated that the
appropriate market in which to evaluate the competitive effects of both
transactions is the wider vacation market. There is no doubt that cruise
companies undertake substantial efforts to attract consumers from other vacation
options.
The cruise business in Europe is in its infancy, accounting for less than 1 per
cent. of the outbound vacation market. In 2000 outbound European holiday volume
totalled approximately 370 million persons, whilst the total number of European
cruise holidays totalled only 2.1 million. As such Carnival believes that
antitrust issues should not represent a major hurdle. Even if regulators look at
the cruise sub-sector, Carnival believes that the proposed Carnival/P&O Princess
combination would not lead to the creation or strengthening of a dominant
position in the EEA.
In the cruise sub-sector, Carnival and P&O Princess hold a combined share of
only 32 per cent. in the EEA as a whole, which is well below the level at which
there is a risk of the combined entity being dominant. Moreover, at national
level within the EEA, there is very little overlap between Carnival and P&O
Princess. P&O Princess has significant cruise sales only in Germany and the UK,
where Carnival is relatively weak. In contrast, Carnival's main strength in
Europe is in the southern countries of Italy, Spain and France, where P&O
Princess' cruise sales are virtually non-existent.
The only EEA countries in which Carnival and P&O Princess have any material
overlap are the UK and Germany. In the UK, P&O Princess is estimated to carry 23
per cent. of all cruise passengers whilst Carnival accounts for only 9 per
cent., giving a combined share of 32 per cent. in cruises. Royal Caribbean's
share of UK cruise passengers is estimated to be 7 per cent. so its combined
share with P&O Princess would be 30 per cent.
In Germany, P&O Princess is estimated to have 18 per cent. of cruise passengers,
while Carnival's share is only around 10 per cent., giving a combined share of
28 per cent. Royal Caribbean's share in Germany is estimated to be 6 per cent.,
so its combined share with P&O Princess would be 24 per cent.
Consequently, there are only very minor differences in the combined cruise
shares in the UK and Germany that would result from either deal. Carnival
believes, and has been advised, that these minor differences should make no
difference to the antitrust assessment of the two transactions.
Although the Royal Caribbean Proposal may receive regulatory clearance in the UK
prior to the Carnival Offer receiving EU clearance, the fact that both the Royal
Caribbean Proposal and the Carnival Offer are now under review at the FTC on the
same timetable means that the antitrust conditionality of both transactions
should be determined at the same time.
Carnival continues to believe firmly, and has been so advised, that there is no
material difference between the regulatory positions of the Carnival Offer and
the Royal Caribbean Proposal. Carnival believes that P&O
Princess' claim that the Royal Caribbean Proposal faces less regulatory risk is
therefore both unsupportable and disingenuous.
MICKY ARISON, THE CHAIRMAN AND CHIEF EXECUTIVE OF CARNIVAL, COMMENTED:
"P&O PRINCESS SHAREHOLDERS SHOULD NOT ALLOW THEIR BOARD TO MISLEAD THEM ON THE
REGULATORY ISSUES. THERE IS NO DISCERNABLE DIFFERENCE IN THE REGULATORY ANALYSIS
OF EITHER TRANSACTION, PARTICULARLY SINCE BOTH TRANSACTIONS WILL BE REVIEWED ON
THE SAME MARKET DEFINITION. FOR THE P&O PRINCESS BOARD AND/OR ROYAL CARIBBEAN TO
SUGGEST ANYTHING TO THE CONTRARY IS A DISSERVICE TO THEIR SHAREHOLDERS AND IS
IRRESPONSIBLE RHETORIC.
OUR TRANSACTION IS EVERY BIT AS DELIVERABLE AS ROYAL CARIBBEAN'S; THE PRINCIPAL
DIFFERENCE BEING THAT OUR TRANSACTION IS AT A SIGNIFICANTLY HIGHER CURRENT VALUE
WITH MORE DELIVERABLE VALUE CREATION IN THE FUTURE. WE REMAIN FULLY COMMITTED TO
PURSUING OUR OFFER DIRECTLY WITH THE P&O PRINCESS SHAREHOLDERS IN ADVANCE OF THE
EGM ON 14 FEBRUARY 2002."
ENQUIRIES:
CARNIVAL Telephone: +1 305 599 2600
Micky Arison
Howard Frank
MERRILL LYNCH Telephone: +44 20 7628 1000
Philip Yates
James Agnew
Stuart Faulkner
UBS WARBURG Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
FINANCIAL DYNAMICS Telephone: +44 20 7831 3113
Nic Bennett
Scott Fulton
Terms used in this announcement have the same meaning as in the Announcement
dated 16 December 2001.
The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess and Royal Caribbean
which has been compiled from published sources is to ensure that the information
has been correctly and fairly reproduced and presented.
Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Offer and will not be
responsible to anyone other than Carnival for providing the protections afforded
to clients respectively of Merrill Lynch International and UBS Warburg Ltd. as
the case may be or for providing advice in relation to the Offer.
SHAREHOLDER DISCLOSURE OBLIGATIONS
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of 1 per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the City Code to notify the London Stock Exchange and
the Panel of every dealing in such securities during the period from the date of
the Announcement until the first closing date of the Offer or, if later, the
date on which the Offer becomes, or is declared, unconditional as to acceptances
or lapses.
Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be sent to the Company Announcements Office of the London
Stock Exchange (fax number: +44 20 7588 6057) and to the Panel (fax number: +44
20 7256 9386).
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Refo\rm Act of 1995.
Carnival has tried, wherever possible, to identify such statements by using
words such as "anticipate," "assume," "believe," "expect," "intend,"
"plan" and words and terms of similar substance in connection with any
discussion of future operating or financial performance. These forward-looking
statements, including those which may impact the forecasting of Carnival's net
revenue yields, booking levels, price, occupancy or business prospects, involve
known and unknown risks, uncertainties and other factors, which may cause
Carnival's actual results, performances or achievements to be materially
different from any future results, performances or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions which may impact levels
of disposable income of consumers and the net revenue yields for Carnival's
cruise products; consumer demand for cruises and other vacation options; other
vacation industry competition; effects on consumer demand of armed conflicts,
political instability, terrorism, the availability of air service and adverse
media publicity; increases in cruise industry and vacation industry capacity;
continued availability of attractive port destinations; changes in tax laws and
regulations; Carnival's ability to implement its shipbuilding program and to
continue to expand its business outside the North American market; Carnival's
ability to attract and retain shipboard crew; changes in foreign currency rates,
security expenses, food, fuel, insurance and commodity prices and interest
rates; delivery of new ships on schedule and at the contracted prices; weather
patterns; unscheduled ship repairs and dry-docking; incidents involving cruise
ships; impact of pending or threatened litigation; and changes in laws and
regulations applicable to Carnival.
Carnival cautions the reader that these risks may not be exhaustive. Carnival
operates in a continually changing business environment, and new risks emerge
from time to time. Carnival cannot predict such risks nor can it assess the
impact, if any, of such risks on its business or the extent to which any risk,
or combination of risks may cause actual results to differ from those projected
in any forward-looking statements. Accordingly, forward-looking statements
should not be relied upon as a prediction of actual results. Carnival undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
CARNIVAL PLANS TO FILE A REGISTRATION STATEMENT ON FORM S-4 AND A STATEMENT ON
SCHEDULE TO WITH THE US SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH
COMMENCEMENT OF THE OFFER. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND OTHER
DOCUMENTS RELATING TO THE OFFER. CARNIVAL PLANS TO MAIL THE PROSPECTUS CONTAINED
IN THE FORM S-4 TO SHAREHOLDERS OF P&O PRINCESS WHEN THE FORM S-4 IS FILED WITH
THE SEC. THE FORM S-4, THE PROSPECTUS AND THE SCHEDULE TO WILL CONTAIN IMPORTANT
INFORMATION ABOUT CARNIVAL, P&O PRINCESS, THE OFFER AND RELATED MATTERS.
INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4, THE PROSPECTUS, THE
SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE
OFFER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE OFFER. THE
FORM S-4, THE PROSPECTUS, THE SCHEDULE TO AND ALL OTHER DOCUMENTS FILED WITH THE
SEC IN CONNECTION WITH THE OFFER WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT
THE SEC'S WEB SITE, AT WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND ALL OTHER
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE OFFER WILL BE MADE AVAILABLE
TO INVESTORS FREE OF CHARGE BY WRITING TO TIM GALLAGHER AT CARNIVAL CORPORATION,
CARNIVAL PLACE, 3655 N.W. 87 AVENUE, MIAMI, FLORIDA, 33178-2428, US.
IN ADDITION TO THE FORM S-4, PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE OFFER, CARNIVAL IS OBLIGATED TO FILE
ANNUAL, QUARTERLY AND CURRENT REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
WITH THE SEC. PERSONS MAY READ AND COPY ANY REPORTS, STATEMENTS AND OTHER
INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC AT 1-800-SEC-0330 FOR
FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS WITH THE SEC ALSO ARE
AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND AT THE
WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.
APPENDIX
BASES AND SOURCES OF INFORMATION
1. The figure for outbound European holiday volume and the number of European
cruise holidays in 2000 are sourced from the "Cruise Industry Statistical
Review 2001", published by G.P. Wild (International) Limited in November
2001.
2. The percentage of the vacation market accounted for by the cruise industry
is calculated by dividing the outbound European holiday volume by the
number of European cruise holidays in 2000.
3. The combined market share of Carnival and P&O Princess in the EEA is based
on information about the total market obtained from the "Cruise Industry
Statistical Review 2001", published by G.P. Wild (International) Limited in
November 2001 and the Passenger Shipping Association (PSA) "Annual Cruise
Market Digest UK Europe 2000"; the market share of Carnival is derived from
internal management sources and that of P&O Princess is based on Carnival
estimates.
4. The shares of the cruise segment in the UK and Germany for Royal Caribbean
and P&O Princess are extracted from an equity research report published by
Deutsche Bank on 11 December 2001. The market share of Carnival is derived
from internal management sources.