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P&O Cruises To Spin Off Business

February 4, 2000

LONDON (AP) _ The Peninsular & Oriental Steam Navigation Co. said Thursday that it will spin off its cruise business as a new London-based company.

If shareholders approve, P&O hopes to complete formation of the new company by the end of the year.

The announcement is the latest step in a four-year restructuring of the company, which has previously floated its Bovis Homes subsidiary and sold its property portfolio.

The new company will include P&O Cruises, based in Britain; Princess Cruises which operates in Alaska, Europe and the Caribbean, and the German cruise company Aida Cruises. The new cruise company will be listed on both the London and New York stock exchanges, the company said.

Analysts estimated the new company could have a market value as much as $10 billion.

Peter Ratcliffe, now president of Princess Cruises, will assume executive responsibility for P&O’s cruises division and will become chief executive of the new company, the company said.

Lord Sterling, the chairman of P&O, will also chair the new company.

``The de-merger we are announcing today ... will enable both businesses to pursue the strategies that best meet their long term objectives and to accelerate their future growth,″ Sterling said.

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