Royal Caribbean Announces $3 Billion Stake in Sandals Resorts, Shares Drop
Royal Caribbean Group (RCL) shares fell nearly 5% after announcing a deal to acquire a 50% stake in Sandals and Beaches Resorts for approximately $3 billion. The transaction is valued at roughly 10 times forward EBITDA and will be funded through debt, raising concerns among investors about the company's financial leverage and expansion into land-based resorts—a new operating model compared to its cruise business. Carnival (CCL) and Norwegian Cruise Line Holdings (NCLH) also declined by around 3%, though both stocks have already dropped significantly year-to-date. The broader cruise sector is under pressure, with RCL down 17% YTD, CCL at -28%, and NCLH at -38%. Analysts are cautious about the deal's impact on earnings accretion, which remains several quarters away. The joint venture will be governed by a shared board led by Royal Caribbean CEO Jason Liberty and Sandals Resorts' Adam Stewart. The transaction is expected to close early next year.
