Kirkland & Ellis is advising Royal Caribbean Group on its $3bn acquisition of a 50% stake in resort operator Sandals, repped by Latham & Watkins and Jones Day.
The deal – the largest in Royal Caribbean's history – will see it add Sandals' 20 resorts across the Caribbean to its portfolio and comes as the cruise operator focuses on expanding its land-based vacation offerings.
Kirkland's team was led by Austin-based corporate partner Kim Hicks and New York corporate partners Steven Choi and Edward Lee, while Latham's effort is being led by Chicago corporate partners Jonny Solomon and Michael Pucker.
The deal brings an end to a years-long effort to sell Sandals that was complicated by the death of founder Gordon Stewart in 2021, which led to legal battles over the trusts holding parts of his estate.
The deal with Royal Caribbean will see it take a 50% stake in a new joint venture controlling Sandals for $3bn, with members of Stewart's family to retain control of the other half of the business.
Cruise operators have underperformed the wider market this year for the first time since the Covid-19 pandemic, according to the Financial Times, as conflict in the Middle East hits demand.
Royal Caribbean has emerged as the heavyweight of the cruise sector under the leadership of chief executive Jason Liberty, with a market capitalisation of $62bn. However, it cut its revenue growth projections for the year from 10% to 9% in its second-quarter results in July.
The company called in Skadden to advise on its last major deal – its 2018 acquisition of a majority stake in the luxury cruise line Silversea for $1bn from Italian shipping scion Manfredi Lefebvre d’Ovidio. Silversea was advised on the matter by Morgan Lewis.
Liberty said in a statement that the Sandals partnership was “an important next step” in building Royal Caribbean’s wider vacation platform, “bringing together two iconic leading vacation companies to strengthen and grow one of the most admired resort portfolios in the world”.
The deal is expected to close in early 2027. Bank of America and PJT Partners provided financial advice to Sandals, while Perella Weinberg and Morgan Stanley served as Royal Caribbean’s advisers.
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