P&O has announced that it intends to spin off its cruise business - P&O Cruises, P&O Holidays and Princess Cruises - into a separate cruise company to be listed in London and on the New York Stock Exchange before the end of the year.

With nine ships, Princess is the third largest cruise operator in North America. P&O Cruises is the leading cruise company in Great Britain with three ships and a fourth slated for delivery this year. P&O also owns and operates Swan Hellenic Cruises, which charters one ship.

In addition is P&O Holidays with one ship sailing out of Australia, and the two-ship Aida Cruises in Germany, which has another two ships under construction.

With a total of 11 ships under construction or on order, the Princess/P&O cruise fleet will double over the next five years.

The current president of Princess, Peter Ratcliffe, will be CEO of the new company. P&O's chairman Lord Sterling will also become chairman of the new company.

The decision to spin off its cruise business follows P&O's progress in focusing on its three core businesses - cruises, ferries and ports. The ongoing business will continue to focus on ferries and ports.