Royal Caribbean Buys 50% Sandals Stake for $3B

Royal Caribbean Group has agreed to pay approximately $3 billion in cash to acquire a 50% equity stake in Sandals Resorts and Beaches Resorts, establishing an all-inclusive joint venture that values the Caribbean operator at roughly $6 billion. The transaction marks the cruise line's formal expansion into land-based hospitality, with closing scheduled for early 2027 subject to approvals.

What are the financial terms of the joint venture?

Royal Caribbean Group will acquire the 50% ownership stake at an enterprise valuation of approximately $6 billion, paying around $3 billion in cash [1]. According to Hotel Business, the cruise group is acquiring the half-stake at a forward EBITDA multiple of approximately 10x [3]. To fund the purchase, Royal Caribbean Group secured committed debt financing from Morgan Stanley [3]. In a filing with the U.S. Securities and Exchange Commission, Royal Caribbean disclosed the 50% ownership figure [1]. The cruise company stated that the investment is expected to be accretive to earnings next year [3].

Which assets and destinations are included in the acquisition?

The transaction covers the full Caribbean resort portfolio of both Sandals Resorts and Beaches Resorts [[1], [3]]. As Skift reported, the purchase includes Sandals' adults-only properties in Jamaica, Antigua, and Saint Lucia [1]. In addition, the agreement encompasses the family-friendly Beaches brand across the Caribbean, uniting more than four decades of all-inclusive operational history under the newly formed partnership structure [[1], [3]].

How will Sandals and Beaches Resorts be governed and run?

The joint venture will operate under a shared governance structure led jointly by Adam Stewart and Jason Liberty [3]. Stewart will remain in his role as executive chairman of Sandals Resorts and Beaches Resorts to steer long-term growth [3]. Liberty serves as chairman and CEO of Royal Caribbean Group [3]. Day-to-day operations will not see immediate structural changes: existing reservations, current loyalty programs, resort teams, and cruise operations will continue as usual [3].

What is the commercial rationale behind the joint venture?

The transaction pairs Sandals and Beaches' Caribbean resort footprint with Royal Caribbean Group's broader vacation platform [3]. According to reporting by Hotel Business, the cruise operator's portfolio encompasses Royal Caribbean, Celebrity Cruises, and Silversea, alongside private island destinations, a river cruising offering, and customer loyalty programs [3]. The companies highlighted that the combined platform allows them to pursue expanded participation in an addressable global vacation market estimated at $2 trillion [3]. Both groups intend to cross-leverage distribution channels, expand guest discovery, and provide fresh capital resources to accelerate resort expansion across the Caribbean [3].

Who advised Royal Caribbean and Sandals on the transaction?

Sandals Group retained BofA Securities and PJT Partners as financial advisors, with Latham & Watkins and Jones Day providing legal counsel [3]. Royal Caribbean Group engaged Perella Weinberg Partners and Morgan Stanley as financial advisors, while Kirkland & Ellis LLP served as legal advisor [3]. The deal was officially confirmed on a Wednesday following initial industry reports that discussions were underway, Skift reported [[1], [2]]. Both parties anticipate completing customary closing conditions and obtaining regulatory approvals ahead of the early 2027 close [[1], [3]].