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Dubai “is out to conquer by land, sea and air”, said Lex in the FT. The state-owned flag carrier airline Emirates is flourishing, and a national holding company has scooped up 2% of Daimler Chrysler.
Now the state-owned ports operator, Dubai Ports World (DPW), is reputedly in talks to buy its British counterpart P&O, the world’s fourth-biggest container port operator, for around £3bn. The news has sent the shares rocketing by almost 40%.
You can see the appeal for DPW, said Terry Macalister in The Guardian. China’s industrialisation, along with the outsourcing trend, has engendered a huge shipping boom, which is “liquid gold” for operators of container terminals. Ocean shipping volumes are expected to expand by an annual 6% to 7% “for years”, said Edward Hadas on Breakingviews.com. Moreover, half of P&O’s global portfolio of “high-quality” ports are in Asia, where shipping growth should be fastest.
Given all this, it’s no surprise that DPW may have to fend off competition to clinch a deal, said Robert Wright in the FT. Hutchinson Ports of Hong Kong is likely to be keen to cement its market leadership, while Denmark’s AP Moller-Maersk “is in an acquisitive mood”. Singapore’s port operator PSA may also be keen. P&O’s shareholders have sat out a “painful restructuring” over the past few years, said Lex. If an auction develops, they will be “handsomely rewarded”.
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Andrew Van Sickle
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