Saudi fund in early talks to potentially buy Carnival’s ultra-luxury Seabourn brand

An aerial view of Seabourn Encore cruise ship docked at Bodrum Cruise Port on April 27, 2022, in Mugla, Turkey.

Ali Balli | Anadolu Agency | Getty Images

Carnival is in preliminary discussions to sell its Seabourn ultra-luxury cruise brand to the Saudi sovereign wealth fund, people familiar with the situation told CNBC.

Talks between the two parties are still ongoing. A deal of this size would give the Saudis a stronger footprint in the cruise industry, at a time when travel continues to rebound across the Middle East.

It would also give Carnival access to more capital, with shares losing over 40% in the past three months. The price tag for Seabourn wasn’t immediately clear.

Carnival said it won’t comment on rumor or speculation. The Saudi fund, also known as Public Investment Fund, didn’t immediately reply to a request for comment.

Talks to sell Seabourn come less than a week after Carnival raised over $1 billion in the debt market at a yield of 10%.

Seabourn came to market in 1988 and operates six ships. Its destinations span from Antarctica to the Middle East to the Caribbean.

The Saudi sovereign wealth fund, also known as the Public Investment Fund, purchased a stake in Carnival at the height of the pandemic in 2020. It currently has a 5.1% stake in Carnival, according to FactSet.

Private equity firms have also been buyers in the cruise space. In March 2021, Royal Caribbean sold its Azamara cruise brand to Sycamore Partners for $201 million. Both TPG and Apollo Group invested billions in Norwegian Cruise Line in 2008, eventually taking the cruise operator public in 2013. TPG is currently invested in Viking Cruise, while Bain Capital is Virgin Voyage’s main investor.