MIDDLE EAST-BASED port terminal operator DP World has agreed to buy Peninsular & Oriental Steam Navigation Co.(P&O) for GBP3.32 billion (US$5.7 billion), which will elevate it to become the world′s third largest container terminal company upon completion of the deal.
DP World said in a statement that it will pay 443 pence a share in cash for P&O, or 43 per cent above the closing price of the UK container ports and ferries group on October 28, the final trading day before P&O said it was involved in negotiations.
The purchase of P&O gives DP World 29 container terminals including Southampton in the UK, Qingdao in China and Chennai in India.
DP World is based in the Jebel Ali Free Zone south of Dubai and is owned by the city′s government. The company handled eight million TEU in 2004, while P&O handled 13.8 million TEU in 2004 and 10.9 million TEU in the first nine months of 2005.
Commenting on the deal, Sultan Ahmed Bin Sulayem, DP World′s chairman said: "DP World′s acquisition of P&O will create a top three global ports operator with the scale and network to service an increasingly global and consolidating customer base. The unparalleled strategic fit of the two companies′ complementary global ports portfolios and the strong development pipeline, including London Gateway, is particularly compelling."
Sir John Parker, the chairman of P&O, said: "DP World′s offer recognises that P&O is a unique brand with an exceptional footprint of international port assets. P&O is one of the top four international port operators with 29 container terminals and operations in 18 countries across the globe, generating 80 per cent of the Group′s total profits. The board believes this all cash offer is in the best interests of the deferred stockholders who will receive a substantial return on their investments."