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Marine Log

September 6, 2007

Carnival Spanish JV on track, but German JV plan fizzles

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) says it has finalized an agreement with Orizonia Corporacion, Spain's largest travel company, for a previously announced multi-ship cruise brand serving the Spanish market.

However, in a separate announcement, Carnival said it had agreed with Germany's TUI AG (DE: TUAG00) not proceed with a proposed joint venture to develop a new cruise brand for Germany.

Carnival is to withdraw its antitrust filings with the German Federal Cartel Agency, Bundeskartellamt, and the Austrian Federal Cartel Agency, Bundeswettbewerbsbehorde.

Carnival cited an extremely difficult regulatory environment in Germany that made it impossible to close the proposed joint venture this fiscal year. Failure to do so would create adverse tax consequences for the company that would impact the economics of the transaction. As a result of the regulatory and tax issues

Though Carnival and TUI will not go ahead with the proposed joint venture they will continue to explore other opportunities.

Carnival says it will continue to grow its presence in Germany organically through new ship construction for its AIDA and Costa brands, as well as through Cunard Line whose Queen Mary 2 will operate a series of trans-Atlantic crossings from Hamburg in 2008.

Meantime, the transaction with Orizania is expected to close on September 14, 2007, with Carnival owning 75 percent of the joint venture and Orizonia owning 25 percent. The new joint venture company will be consolidated into Carnival Corporation & plc's financial results starting in the fourth quarter 2007 and is expected to be accretive to results in 2008.

To be called Iberocruceros, the new joint venture combines the two vessels of Orizonia's existing cruise operations with a ship from the Carnival group.

In addition to Orizonia's 1,244-passenger Grand Mistral and 834-passenger Grand Voyager, the 1,486-passenger Celebration from Carnival Cruise Lines' fleet, will be transferred to the new Iberocruceros company. After an extensive renovation, the Celebration is scheduled to enter service in late spring 2008.

Alfredo Serrano, currently general manager of the Iberojet fleet, has been appointed general manager of Iberocruceros, which will be headquartered in Madrid. Serrano will report to the newly formed Iberocruceros board whose chairman will be Pier Luigi Foschi, chairman and CEO of Carnival Corporation & plc's Costa Cruises unit. The board will also include Orizonia CEO Gabriel Subias.

"The new Iberocruceros joint venture will build upon the tremendous brand awareness of Orizonia's Iberojet operations - one of Spain's leading vacation companies - while providing a solid platform for expanding in the fast-growing European marketplace," said Micky Arison, Carnival Corporation & plc's chairman and CEO.

The three Iberocruceros ships will fly the Italian flag. Itineraries for its vessels will be announced shortly.

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