Carnival Corp. in preliminary deal with Chinese group

Carnival Corp. signed a memorandum of understanding with China Merchants Group (CMG) to pursue a possible domestic Chinese cruise line and to develop cruise ports.

Carnival said it formalized a strategic partnership with CMG at a signing event at the Hilton Shenzhen Shekou.

CMG is already developing a flagship port called Prince Bay Cruise Terminal in Shekou. Carnival said the partners would work to have cruise ships sail from this flagship port, while also developing other cruise destinations across China and northern Asia.

In addition, Carnival and CMG will explore a joint venture that would own and operate its own cruise ships as part of the first domestic Chinese cruise line targeted to the Chinese market. The joint venture would explore the possibility of sourcing new ships that are designed and built in China, along with the possibility of acquiring existing cruise ships.

Carnival last year signed a separate memo with China State Shipbuilding Corp (CSSC). to design and build a cruise ship in China in partnership with Fincantieri. That memo also contemplated the exploration of other possible joint venture opportunities with CSSC, including the potential to form a domestic cruise company, port development, talent development and training as well as supply chain and logistics.

It isn’t clear how that agreement would be affected by the one announced with CMG.

“The MOU we signed today signifies a great opportunity to take the next step in the future of Chinese cruising, while addressing some key needs for both the cruise industry and its passengers in China,” said Alan Buckelew, COO of Carnival Corp.

CMG, China’s oldest state enterprise founded in 1872, focuses on transportation, infrastructure, financial services and real estate development.