The world’s biggest cruise ship operator is hoping an historic Alaska rail gateway will be a gold mine for its tourist trade.
Cruise ship operator Carnival Corp. will acquire the White Pass & Yukon railroad from owner TWC Enterprises Limited.
The purchase agreement includes the White Pass rail and port operations based in Skagway, for US$290 million in debt, income taxes and other liabilities, expected to be approximately $70-80 million to be deducted from the proceeds. TWC has the option of taking up to $84 million in Carnival shares.
The sale is expected to close on July 31, 2018, subject to regulatory approvals.
The White Pass operates 67.5 miles of three-foot gauge track from Skagway through British Columbia to Carcross, Yukon, and has no direct connection to any other railroad. The railway was constructed during the Klondike Gold Rush of 1898, closed in 1982, and was re-opened in 1988 as a heritage operation. Most trains are diesel-powered, but the road also operates two steam locomotives and some rolling stock built in the late 1800s. It has headquarters and also operates three docks in Skagway that support the railway and provide four berths for cruise ships.
“This asset represents a one of a kind experience and is an iconic name in the Alaskan cruise industry,” said K. Rai Sahi, chairman and chief executive of White Pass parent Morguard Corp. “Carnival already has a strong presence in Alaska with its multiple brands and White Pass represents a very strategic acquisition for them. I feel that this historic asset will be a great fit for Carnival.”
Stein Kruse, group CEO of Carnival plc’s Holland America Group and Carnival UK, said, “As the gateway to the legendary Klondike Gold Rush region, Skagway is beloved by our guests and crew for its warm hospitality and distinctively Alaskan array of sightseeing and recreational activities. We are very committed to the continued development and success of the entire region as one of our most popular destinations.”