UK Court approves $6.8 billion port deal

| Friday, March 03, 2006

Dubai Ports World’s $6.8 billion acquisition of Britain’s Peninsular & Oriental Steam Navigation Co. was sanctioned Thursday, March 2, by the High Court in London. New wrinkles, however, continue to develop in the controversial deal that would give a company owned by the United Arab Emirates control over various operations at key U.S. ports.

Though most of the media is reporting that the deal only involves six U.S. ports, United Press International has reported the deal will involve a total of 21 ports in which P&O has various degrees of operations.

Andrew Rice, a spokesman for Dubai Ports World, confirmed to Land Line that P&O has various degrees of operations in 21 ports along the East and Gulf Coasts of the U.S. including six major operations plus a number of lesser enterprises.

“The simple explanation is, (P&O) has six facilities in six cities and stevedoring contracts in the others,” he said. “P&O has been providing management of labor, of the stevedoring contracts.”

In other words, the new deal would see Dubai Ports World gaining control of some major container terminals in the U.S. and would result in DPW handling the loading and unloading of cargo at other ports where they have stevedoring operations.

Much of the attention has been drawn to the key ports of New Orleans, New York, New Jersey, Philadelphia, Baltimore, New Orleans and Miami. However, the company also runs port operations in Portland, ME, Boston, Gulfport, MS, and Beaumont, Houston and Galveston, TX, among others.

The transaction is now the subject of a review by a panel of officials from the Bush administration.

Meanwhile, the Financial Times is reporting that George Bush may not be the only president in hot water over the deal.

Former President Bill Clinton said he advised top officials in Dubai mid-February on how to address growing concerns over the deal. In fact, he suggested that Dubai propose the 45-day review period that is currently in effect.

Clinton’s advice came at the same time his wife, Sen. Hillary Clinton, D-NY, was threatening legislation that would stop the deal from going through.

And in related news, the U.S. has begun a review of another company, also based in Dubai, which is poised to take over plants in Georgia and Connecticut that build components used in engines for military aircraft and tanks.

The Washington Post reported that the Committee on Foreign Investment in the U.S. is investigating Dubai International Capital’s $1.2-billion acquisition of London-based Doncasters Group Ltd.

The committee is also investigating an Israeli company that wants to buy Sourcefire, a Maryland software security firm that does business with the U.S. Defense Department.

– Terry Scruton, senior writer
terry_scruton@landlinemag.com
Managing Editor Sandi Soendker also contributed to this story.

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