Royal Caribbean Cruises (NYSE:RCL) announced it acquired the remaining one-third stake of Silversea Cruises it didn't already own.

The cruise ship operator said it paid Heritage Cruise Holding 5.2 million shares of its stock -- that's 2.5% of its outstanding shares, which equates to about $245 million. That also values Silversea at around $735 million, a significant discount to the implied value of around $2 billion when Royal Caribbean acquired its two-thirds stake back in 2018.

Cruise ship on the ocean

Image source: Getty Images.

Charting a new course

The cruise ship industry has obviously run aground due to the coronavirus pandemic, which caused customer cancellations, and Royal Caribbean's stock, which had been sailing higher before the crisis, lost 85% of its value.

Although Royal Caribbean has gained more than 160% from its low point, it still trades 62% below the highs it had hit. Last quarter it was forced to write down more than half a billion dollars in goodwill charges attributable to Silversea, or 53% of the amount it had been carrying at the time.

Royal Caribbean has detailed in its SEC filings that Heritage Cruise put options on the remaining 33.3% stake it held, and it could require Royal Caribbean to purchase that stake if certain events occur, or didn't occur. 

In announcing the acquisition today, the cruise ship operator didn't say whether the purchase was predicated on Heritage exercising the put option. Rather, chairman and CEO Richard Fain merely extolled how good of a fit the two companies have been since the beginning.

"The cultures of the two organizations have proven to be harmonious, and guests have responded favorably to the combination," he said in a statement.

Royal Caribbean's stock was trading 7.5% higher after the deal was announced.

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