that they have signed an agreement to merge.

Royal Caribbean International (RCCL) will buy Celebrity Cruise Lines Inc. for $1.3 billion -- as long as certain conditions are met -- making it the largest merger in cruise industry history.

The agreement will create a fleet of 20 cruise ships with more than 38,000 berths by 2000.

But the news means that three of Bermuda's regular visitors will fall under the same umbrella. Celebrity operates Meridian and Zenith while Song of America represents RCCL in Bermuda.

However, Tourism Minister David Dodwell said he did not believe the deal would stop any of the three ships from visiting Bermuda.

Contracts were between the individual ships and Bermuda, he explained, not with the lines.

And Mr. Dodwell noted that RCCL intended to maintain the Celebrity brand separate from the RCCL brand.

But Shadow Tourism Minister David Allen warned that while the merger could be a good thing, Bermuda would have to follow the situation very carefully as the news could mean problems for the Island.

It would be interesting to see what impact the news would have on the Bermuda cruise market, he added, as it could reduce rate competitiveness.

Meyer Agencies president Henry Hayward -- whose company acts for Celebrity and Norwegian Cruise Lines -- agreed with Mr. Dodwell and said he believed the ships would continue their runs as scheduled.

He said RCCL's product and clientele were a "little bit different'' to Celebrity's so he expected them to continue going after their different markets.

Keeping the two brands separate would allow each to maximise its respective strengths within its own category, said an RCCL spokesman.

"Together the two brands will enable us to deploy vessels and attract customers on an increasingly global basis, as well as provide opportunities to achieve greater economies of scale,'' added RCCL chairman and CEO Richard Fain.

He said: "Strategically, this combination helps reshape the vacation industry landscape by providing each brand with the market presence and the operating strengths of the other.'' Celebrity chairman John Chandris said: "The dynamics of the market place and the cruise industry require brand expansion and strategic alliances that emphasise growth strategies.

"The combined experience of our cruise vacation companies is unparalleled.

Their brand awareness and market presence will offer the cruising public the youngest fleet and most diverse product serving the broadest spectrum of worldwide destinations.'' Celebrity is a joint venture company of Overseas Shipholding Group Inc. and the Chandris Group.

The transaction calls for a purchase price of approximately $500 million and the assumption of about $800 million in debt.

"The purchase is subject to certain conditions precedent, including due diligence, board approvals and definitive agreements,'' said the RCCL spokesman.

Mr. Dodwell said the news did not surprise him in the sense that it was part of the dramatic changes taking place in the cruise industry.

Analysts had reckoned that by early next century there would be only four or five cruise lines left in the world as they would acquire each other in an attempt to attract new customers, he added.

Mr. Dodwell pointed out that Norwegian Cruise Line -- which operates Dreamward -- intended to purchase Kvaerner Corporation's 90 percent share in Royal Majesty .

And Mr. Hayward said RCCL were following the same methods used by Carnival Cruises to increase their empire which made sense.

Earlier this month, Carnival, which operates the Seabourne, Windstar and Carnival lines among others, bought Italian cruise ship operator Costa Crociere SpA, in a joint venture with Airtours Plc.

Including Mercury -- which is set to be delivered in October -- Celebrity operates five ships which have all been built this decade and have a double occupancy capacity of 8,200 berths.

RCCL operates 11 ships with a total capacity of 19,770 berths and has four ships on order including two 130,000 ton Eagle class vessels scheduled for service in 1999.

See Editorial on Page 4 TOURISM TOU