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Norwegian goes black tie, buys high-end cruise line Prestige in deal valued at $3 billion

NEW YORK, N.Y. - Norwegian Cruise Line is sailing into the luxury sector by buying the high-end Prestige Cruises International in a deal valued at about $3 billion, including debt.

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 travellers 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 cash-and-stock deal at $3.03 billion when debt is included. The company declined to specify how much debt it would be taking on. 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 per cent of Norwegian, whose shares rose 11 per cent 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. rose $3.68 to close at $36.99 Tuesday.

The Canadian Press

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