Royal Caribbean to buy 50% of Sandals and Beaches for $3.0 billion

Morgan Stanley has committed debt financing for the deal, which is expected to close in early 2027.

Royal Caribbean Cruises has agreed to acquire a 50% equity stake in the business behind Sandals and Beaches Resorts for about $3.0 billion in cash, a price equal to roughly 10 times forward EBITDA. Morgan Stanley has committed debt financing to fund the purchase, and the companies expect the deal to close in early 2027, subject to regulatory approval.

Sandals operates 20 luxury all-inclusive resorts across the Caribbean, according to Reuters. Under the joint venture, that portfolio will sit alongside Royal Caribbean Group's cruise and destination businesses, including the Royal Caribbean, Celebrity Cruises and Silversea brands, Reuters reported. A shared board will oversee the partnership, with Royal Caribbean chairman and chief executive Jason Liberty among its leaders, according to Investing.com. Royal Caribbean and Sandals said the venture builds on Sandals' more than four decades in Caribbean hospitality.

Word of the deal moved the stock before Wednesday's formal announcement. Shares fell more than 6% on Tuesday, closing at $234.89 versus a prior close of $250.25, after CNBC and the Financial Times reported Royal Caribbean was nearing an agreement, according to AskTraders. The Financial Times had put the value of Sandals overall at more than $6 billion, a figure distinct from the $3.0 billion stake price Royal Caribbean has now confirmed.

The purchase adds scale to Royal Caribbean's holdings, but the 10 times EBITDA multiple carries execution risk in a travel market that already has plenty of capacity competing for the same vacation spending. The agreement does not change the structural dynamics of the cruise industry or its near-term demand, making this chiefly a capital allocation decision for Royal Caribbean rather than a shift in direction for the sector.