P&0 Princess tie-up on course

P&O Princess has taken a step closer to sealing its £3.5bn (€5.4bn) tie-up with its US rival, Carnival.

The British cruise operator has confirmed it had scrapped a proposed joint venture in Southern Europe with previous merger partner Royal Caribbean.

The move, which comes at no cost to the UK group, was a pre-condition of Miami-based Carnival's takeover proposal.

P&O Princess says its board will now meet to decide whether to formally recommend the bid to its shareholders before January 10.

The group, which runs the Swan Hellenic, Ocean Village and P&O Cruises brands, succumbed to Carnival's bid three months ago.

Carnival had run a near year-long campaign to foil P&O Princess' preferred "merger of equals" with Royal Caribbean.

Under the £3.5bn (€5.4bn) deal shareholders will receive one Carnival share for every 3.3289 P&O shares they already own.

P&O Princess has already forked out $62.5m (€60m) to break its agreement with Royal Caribbean.

It had to wait until the New Year to end the planned joint venture without incurring any additional penalty. Shareholders of both P&O Princess and Carnival are expected to vote on whether to accept the tie-up in March.