Royal Caribbean is nearing a $3 billion deal to acquire a 50 percent equity stake in resort operator Sandals Resorts International, valuing the Caribbean company at $6 billion. The potential transaction marks a major push for the cruise line to expand its land-based vacation footprint.
Royal Caribbean Pursues $3 Billion Stake in Sandals Resorts
Royal Caribbean is advancing talks to take a 50 percent equity stake in Sandals Resorts International, according to a person familiar with the matter. The person, who asked not to be named because the talks had not been made public, said the deal values the Caribbean resort chain at $6 billion and that it was expected to boost growth for both companies. The proposed transaction carries a value of about $3 billion, although the talks are ongoing and may not result in a deal.
The cruise company has experienced a stock pullback amid the developments. Royal Caribbean shares fell roughly 6% on reports of the potential deal, which was first reported by the Financial Times. The company’s stock is down roughly 25% over the past year after it trimmed its forecasts for revenue growth on softer demand for European sailings.
Diversifying Beyond Cruise Operations Into All-Inclusive Travel
The potential acquisition represents a strategic pivot for Royal Caribbean, which has been intent on diversifying beyond cruises and becoming a leader in vacations overall. While the company already operates several private destinations for its cruise passengers, it has been working to build out its land offerings. The Sandals deal would provide an immediate foothold in all-inclusive options.
Sandals and its Beaches brand, meanwhile, have more than a dozen properties across the Caribbean, with control of 20 Sandals resort properties across the region according to the Financial Times report, citing people familiar with the matter. This established physical footprint would add a new channel for land-based holiday demand. Sandals markets itself to couples and runs the family-oriented Beaches Resorts brand alongside it.
Family Ownership and Prior Sale Efforts
A completed transaction would close out years of on-and-off attempts to sell Sandals, the FT reported. Founder Gordon “Butch” Stewart tried to offload the company two years before his 2021 death to ease estate-planning issues, but the process stalled when the pandemic hit. His death then triggered family disputes and litigation over the trusts holding portions of the estate.
Under the terms being discussed, members of the Stewart family would hold onto equity in the business, with Royal Caribbean taking the controlling position, the FT’s sources said. The FT reported that Stewart’s third wife Cheryl, who with their children holds the largest economic interest in the family trust, has moved legally to alter its governance structure, which sits with a company where older children Adam and Jaime carry significant influence. Bankers were brought in last year to run a fresh sale process that attracted both strategic and private equity interest, according to the report.
Market Response and Unresolved Negotiations
Neither Royal Caribbean nor Sandals immediately responded to requests for comment. If completed, the deal would mark a notable step in Royal Caribbean’s strategy to build a broader vacations platform beyond sea-based travel, while the ongoing talks remain conditional on reaching a final agreement.
