Cruise giant Carnival is preparing to buy the White Pass and Yukon Route railway for US$290 million.
In an announcement June 6, Carnival said it made the deal, which includes White Pass’s ports, railroad and retail operations in Skagway, Alaska, through its subsidiary Holland America Princess Alaska Tours.
The transaction is scheduled to close at the end of July.
According to a press release, Holland America is working on a memorandum of understanding with Survey Point Holdings, Inc., an Alaskan company based in Ketchikan, to become a managing partner in the port, White Pass Scenic Railway and the associated retail operations.
Under the agreement, Survey Point will continue managing the railway’s day-to-day terminal operations and customer relations.
The company is promising to make new investments in the business.
“These investments will include support for expansion of docking facilities to accommodate the newest generation of cruise ships, a key to the port’s long-term success,” the press release says.
Officials with Carnival refused an interview request. In a statement to the News, the company said it will maintain business as usual. “We look forward to working with the White Pass year-round and summer season employees.”
The White Pass and Yukon route runs approximately 110 km from Skagway to Carcross, Yukon. In addition, White Pass operates three docks, primarily for cruise ships.
Carnival’s cruise line operates 103 ships. It calls Holland America Princess Alaska Tours, “the leading tour company” in Alaska and the Yukon.
The railway’s current owner, TWC Enterprises, could not be reached for comment.
As part of the proposed deal TWC has the option of taking up to $84 million US of the proceeds in Carnival shares.
TWC bills itself as Canada’s largest owner and operator of golf clubs with 41 locations in Ontario, Quebec and Florida.
Talk of the company selling off its railway began last year. At the time TWC said it was doing “a strategic review of its investment in White Pass and Yukon Route” which could include the sale of all or a portion of the business, though it provided no details as to why a sale was being considered.
Earlier this year the Town of Skagway suspended lease negotiations with White Pass. The leases for two of the railway’s docks are set to expire in 2023, according to Alaska media. The talks were suspended after the Holland America Group sent Skagway a letter proposing an economic partnership.
Holland America suggested forming a joint venture with the city to lease and manage two of the municipality’s docks and their tidelands, according to Alaska radio station KHNS.
In its statement to the News, Carnival officials said it was too early to comment on the lease negotiations “but we hope to have additional information after the official closing of the deal.”
In an email, Blake Rogers, executive director of Tourism Industry Association of the Yukon, called the deal a “good sign of the company’s long term commitment to our region, and is welcome news to the Yukon’s tourism industry.”
Contact Ashley Joannou at ashleyj@yukon-news.com