Hapag-Lloyd will be folded into Tui Cruises as part of a €1.2 billion deal to become the “second pillar” of the joint venture, benefiting from Tui’s wider “digital transformation” efforts.

The brand will be “integrated into the Tui Cruises joint venture” and placed at the heart of Tui and Royal’s plans to expand their luxury, expedition and premium cruise offering.

Tui and Royal expect to conclude the deal in the summer. “We’re changing the ownership structure behind the brand to facilitate stronger, faster and capital-light growth,” said Tui Group chief executive Fritz Joussen.

The deal, said Tui, will “expedite” its plans to grow its cruise division at a time when global shipbuilding capacity is limited, with Tui Cruises’ three new-builds not scheduled for delivery until 2023, 2024 and 2026.

“Integration of Hapag-Lloyd Cruises in the joint venture will allow Tui to participate in global cruise industry growth at a low level of capital expenditure,” said Tui, adding that the merger of Tui Cruises and Hapag-Lloyd under the joint venture would create a combined fleet of 12 ships.

Once the transaction is completed, Tui Cruises will continue to cater for the “premium German-speaking” market while Hapag-Lloyd will continue to have “an exclusive presence in the luxury and expedition” market.

Hapag-Lloyd’s fleet currently consists of two “five-star-plus” ships, Europa and Europa 2, and three expedition cruise ships, with a further expedition ship on order for delivery in 2021 to replace Bremen.

Tui said the deal could allow it to grow both Hapag-Lloyd’s luxury and expedition fleets “in the coming years”.

Tui and Royal’s joint venture dates back more than 10 years, with Tui bringing its “brand and selling power” and Royal offering digital, operational and shipbuilding expertise.