Norwegian sails into luxury with Prestige purchase

Norwegian sails into luxury with Prestige purchase
FILE - In a Dec. 1, 2013 aerial file photo, the cruise ship Norwegian Breakaway is berthed on the westside of Manhattan in New York. (AP Photo/Mark Lennihan)
NEW YORK (AP) — Norwegian Cruise Line is sailing into the luxury sector, spending about $3 billion in cash and stock to acquire the high-end Prestige Cruises International.

The deal will give Norwegian access to Prestige's eight ships on the Oceania and Regent Seven Seas cruise lines and its big-ticket vacation packages. Norwegian, which owns 13 ships, is known for its "Freestyle Cruising" that lets travelers choose where they want to eat and at what time.

Buying Prestige will help Norwegian be more competitive with its larger rivals: Carnival Corp. owns luxury cruise lines Cunard and Princess, while Royal Caribbean Cruises Ltd. owns Celebrity Cruises.

Norwegian, which is based in Miami, values the deal at $3.03 billion when debt is included. Shareholders including private equity firm Apollo Global Management LLC, Prestige's majority owner, could get another $50 million in cash if certain performance targets are reached.

Apollo also owns about 20 percent of Norwegian, whose shares rose 11 percent Tuesday.

The two other big Norwegian shareholders, Genting Hong Kong Ltd. and TPG Capital, have already signed off on the deal. It's expected to close in the fourth quarter.

Shares of Norwegian Cruise Line Holdings Ltd. added $3.58 to $36.89 Tuesday.