P&O consolidates cruise lead with Italian deal

P&O, the cruise, ports and logistics group, yesterday extended its reach into the European cruise holiday market, with the acquisition of an Italian-based business for up to £447m.

P&O, the cruise, ports and logistics group, yesterday extended its reach into the European cruise holiday market, with the acquisition of an Italian-based business for up to £447m.

It bought Festival, which has operations in Italy, France and Germany, mostly in shares, and P&O will take on some 300m euros of debt.

P&O's cruise business, which will be demerged in October this year, currently makes 75 per cent of its revenues from the US and about 20 per cent from the UK. At the end of last year, P&O bought Aida, a German cruise operator and analysts said yesterday's deal extended P&O strong standing.

Ian Wild, an analyst at SG Securities, said: "P&O will dominate Europe now. It will be very difficult for its American competitors to gain a strong presence here."

Lord Sterling, P&O's chairman, said: "Cruising is only just now beginning to take off in Europe. They're about 15 years behind America and seven to 10 years behind Britain. This is an important strategic move."

He said that the European cruise market was growing at 15 per cent, compared with about 9 per cent in the US. The company plans to keep Festival's brand and product separate from its German Aida business.