Story
Royal Caribbean to Acquire 50% Stake in Sandals Resorts for $3 Billion
Summary
The cruise operator is forming a joint venture with the Stewart family in its largest-ever acquisition, valuing the all-inclusive resort company at $6 billion as it expands its land-based vacation offerings.
Royal Caribbean has agreed to purchase a 50% stake in Sandals Resorts International for $3 billion, marking the largest acquisition in the cruise operator's history. The deal establishes a joint venture that values the prominent all-inclusive Caribbean resort company at $6 billion, according to the Financial Times.
Strategic Rationale and Deal Structure
The transaction will create a new partnership controlling Sandals' 20 hotel properties across the Caribbean. The Stewart family, which founded the company, will retain the remaining 50% ownership. The joint venture's board will be jointly overseen by Royal Caribbean CEO Jason Liberty and Sandals Executive Chairman Adam Stewart.
Liberty described the partnership as "an important next step" in Royal Caribbean's strategy to build a broader vacation platform. The move aims to "further strengthen and grow one of the most admired resort portfolios in the world" by combining the two well-known travel brands.
Market Reaction and Financials
News of the potential deal prompted a negative reaction from investors. Shares in Royal Caribbean (NYSE: RCL) closed down 6.1% on Tuesday. The stock has declined 17% year-to-date, with the company's current market value standing at approximately $62 billion.
AdKey details of the transaction include:
- Purchase Price: $3 billion for a 50% stake.
- Implied Valuation: $6 billion for Sandals Resorts International.
- Advisors: Bank of America and PJT Partners advised Sandals, while Perella Weinberg and Morgan Stanley advised Royal Caribbean.
- Expected Closing: The deal is anticipated to close in early 2027.
Background and Context
The agreement follows years of unsuccessful attempts to sell Sandals, a process that was reportedly complicated by the 2021 death of founder Gordon "Butch" Stewart and subsequent family legal disputes. Sandals is the largest private employer in the Caribbean and operates both its flagship couples-only resorts and the family-oriented Beaches Resorts brand.
For Miami-based Royal Caribbean, this acquisition continues its expansion beyond its core cruise business, which comprises a 71-ship fleet. The company previously acquired a majority stake in luxury cruise line Silversea for $1 billion in 2018 before later taking full ownership.
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