Dubai firm sells its stake in Port of Miami-Dade
Miami Herald Staff and Wire Report
American International Group, the world’s largest insurer, agreed to buy DP World’s U.S. port terminals — including its stake in the Port of Miami-Dade — after the Dubai-owned company was forced to sell under pressure from U.S. lawmakers.
AIG’s asset management and private equity unit, AIG Global Investment Group, will purchase the terminals plus cargo handling operations and a New York passenger terminal, DP World CEO Mohammed Sharaf said today in a telephone interview from Dubai.
”They are 100 percent American and they offered the best price,” Sharaf said, declining to comment on the value of the sale or whether DP World made a profit on the transaction. ”We want to come back to the U.S. should the timing be right and should we be welcomed,” he said.
DP World, owned by the emirate of Dubai, United Arab Emirates, bought London-based Peninsular & Oriental Steam Navigation Co. for $6.8 billion in February to become the world’s third-biggest container port operator after Singapore-owned PSA International Pte. In March it agreed to sell P&O terminals in the United States when the deal caused a political uproar.
Ontario Teachers’ Pension Plan, Canada’s third-biggest retirement-fund manager, agreed last month to buy four North American container terminals from Orient Overseas (International) Ltd. for $2.35 billion.
AIG Global Investment Group invests funds that are held to pay claims for policyholders of its property and casualty and life insurance units.
Lawmakers, including New York Democratic Sen. Charles Schumer, threatened to block the takeover on the grounds that two of the Sept. 11 hijackers had come from the United Arab Emirates and that the plotters used the Persian Gulf country’s banking system to funnel money to the operation.
Dubai ”understands even at the peak of the crisis earlier this year there was no damage to the relationship between America and the U.A.E.,” Mustafa Alani, director of national security at the Gulf Research Center in Dubai, said in a phone interview from Dubai.
DP World was seeking $700 million, or about 10 percent of the price it paid for P&O, Lloyd’s List reported Oct. 3, citing Jamal bin Thaniah, head of the Dubai ports and free zones authority of which DP World is a unit. The terminals accounted for 10 percent of P&O’s global assets before Dubai’s takeover.
”Our understanding with the U.S. authorities is that we will sell to U.S. entities with no economic loss,” Yuvraj Narayan, DP World’s senior vice president for corporate strategy, said in a March 15 interview.
DP World now aims to transfer the terminals to AIG in the first quarter of 2007, according to Sharaf. The leases on the terminals that AIG bought are between one and 40 years, and the sale was entirely in cash, he said.
Transactions in the shipping and ports sector jumped 41 percent to $30.6 billion in the first nine months of this year compared with the same period a year ago, according to data compiled by Bloomberg.
DP World is planning an initial share sale to fund global expansion and could be worth as much as $10 billion, according to estimates by London-based consulting firm Drewry Shipping.