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Marine Log

December 15, 2006

Carnival and TUI plan German cruise joint venture

Carnival Corporation & plc (NYSE: CCL; LSE) (NYSE: CUK), the largest cruise vacation group in the world, and TUI AG (DE: TUAG00), the world's largest tour operator, today announced the signing of a letter of intent to form a joint venture company to develop, market and operate two cruise brands--Carnival's existing AIDA Cruises and a new TUI Cruises brand.

Both are designed for the German-speaking vacation market.

Under the proposed joint venture agreement, a new TUI Cruises brand, which will target a different segment of the German cruise market than AIDA's, will be developed.

It is expected that the first TUI branded ship, with an estimated 3,000 passenger berths, will be delivered in spring of 2010.

The new joint venture company will be managed under the direction of Pier Luigi Foschi, chairman and CEO of Carnival's Costa Cruises unit, who currently oversees Carnival's German operations, including AIDA.

Michael Thamm, president of AIDA Cruises, based in Rostock, Germany, will become president of the new joint venture company.

Under the proposed transaction, TUI will initially purchase five percent of the joint venture in 2007 and is expected to purchase another 20 percent in 2010. For purposes of this transaction, AIDA's business was valued at Euros 1.9 billion for inclusion in the joint venture, which will be formed with Euros 600 million of indebtedness. The purchase price will be paid to Carnival in cash at the closing of each transaction based on a net equity value of euro 1.3 billion. When the initial five percent purchase closes in 2007, Carnival expects to record a pre-tax gain of approximately euro 60 million ($80 million). Another gain will be recorded under U.S. accounting principles at the time of closing of the subsequent 20 percent purchase in 2010.

"TUI is a highly diversified and experienced company in the European travel and tourism sector and has extensive brand awareness throughout Europe, particularly in Germany," said Micky Arison, Carnival Corporation & plc chairman and CEO. "By combining TUI's strengths with Carnival's tremendous experience in building, operating and marketing cruise ships, we are creating an excellent platform for growth in the rapidly expanding German cruise market."

Added Dr. Michael Frenzel, CEO of TUI AG, "With AIDA Cruises, Carnival has already set up a successful and profitable model in the German cruise market. By entering into this joint venture and benefiting from Carnival's unrivaled expertise, we are able to put the TUI Cruises brand on water. Together, AIDA and TUI Cruises will provide ideal offers to an even larger potential of cruise customers in this commercially highly interesting segment."

The transaction is expected to close in the first half of 2007 pending approval of both companies boards of directors, all necessary regulatory approvals, customary due diligence and the execution of definitive agreements.

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