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TUI AG To Sell Hapag-Lloyd Cruises Unit To JV TUI Cruises In €1.2 Bln Deal

Tour operator TUI AG (TUIFF.PK) announced Friday that its unit Hapag-Lloyd Cruises will be bought by TUI Cruises for an enterprise value of 1.2 billion euros.

TUI Cruises is a 50:50 joint venture owned by TUI AG and Royal Caribbean Cruises Ltd.

The expected net cash consideration in the deal is about 700 million euros, including an earn-out element of 63 million euros, payable upon Hapag- Lloyd Cruises delivering its FY 2020 budget EBIT.

The company expects the deal to generate a considerable book gain. The transaction is expected to complete in summer 2020, subjected to customary closing conditions and certain regulatory approvals.

Hapag-Lloyd Cruises, a provider of luxury and expedition cruises in German-speaking markets, is part of the TUI Group's cruise businesses. Its fleet currently consists of two luxury ships within the five star plus category and three expedition cruise ships. A further expedition cruise ship has been ordered and will be added to Hapag-Lloyd Cruises' fleet in 2021 to replace Bremen.

In the financial year 2019, Hapag-Lloyd Cruises generated a total revenue of 305 million euros, an underlying EBITA of 43 million euros and reported gross assets of 660 million euros.

TUI and Royal Caribbean Cruises have agreed to expand their partnership to use the JV structure of TUI Cruises also for the luxury and expedition cruise segment.

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