Still In The Shadows: DP World
In February, the Bush Administration approved the sale of a UK-based firm, which operates at least 20 US port facilities, to a United Arab Emirates firm, DP World. The proposal generated a firestorm of protest, resulting in the decision to find a domestic buyer for US operations.
It's nine months later ... and the US facilities remain under the control of DP World, despite a March announcement that they would be sold.
In November, The Business (London) reports that a French firm, the third largest in the world, is "planning an audacious bid for P&O’s ports in the United States." (Data corrected: 8/11 misinterpreted as 11 August instead of 8 November.)
The French firm, CMA CGM, would be a junior partner with investment bank Morgan Stanley. [Why would an investment bank be the lead in this partnership, except to how a US owner?]
In in September, the Financial Times reported that Morgan Stanley (an investor), the Carlyle Group (an investor) and privately-held SSA Marine (the largest US container terminal operator) were among the final bidders in phase two of the sale.
The former P&O assets are among the largest blocks of port assets to have come up for sale in the US in recent years, although the US port assets of Hong Kong's Orient Overseas Container Line are also now up for sale.
There's no more recent mention in Google news, Lexis-Nexis, or the Financial Times. Do you know what's up with this deal? [See comments for additional details.]
Originally posted 9 November at 1 am Eastern
Comments
5 bidders (8 firms total) continue to perform due diligence and financial audits of the US assets and management contracts. The firms have been asked to submit final bids no later than November 30. DP World will then choose the new owner or ask for another round of bids if necessary.
Companies confirmed bidding via press reports or financial and government sources include
- Carlyle Group (75%)w/ Carrix (25%)
- Morgan Stanley (75%)w/ CMA CGM (25%)
- Marine Terminal Corp (50%) w/ Canadian investment firm (50%)
2 other firms bi=dding believed to be investment funds, one Government related and one major US insurance firm.
Goldman Sachs, Macquarire Banks, and bidding Logistics have dropped out of the bidding.
* Carrix, Parent company of SSA Marine
Thanks, Andrew!
Your web search skills must be excellent — because this is far more detailed info than I can find via Lexis-Nexis.
Kathy
Kathy,
the detail posted was gathered through several people close to the sale as well as Government officials overseeing the process. Expect some sort of announcemet no later than Dec 7. The above should have read NYK Logistics dropped out from a consortium.
I expect no news until the sale is final. The CMA article posted in the Business was released November 8 (8/11).
The deal has been delayed by about 2 months from the original 4 - 6 month promise. Since the election went the way it did, the controvesry was dimned.
Cheers
Cheers
Is there a link between Carlyle Group (”CG”) and the French company “CGM”?
Just wondering.
Kathy,
re: CMA CGM and Carlyle Group, there is no “connection” to my knowledge. There is strong Middle Eastern investment in both Morgnan Stanly and Carlyle Group funds.
The large US insurance firm is also bidding under one of their infrastructure funds called Highstar. I am not able to cite the final equity bidder. This debate has been rather colourful to watch.
Cheers
Thanks, Andrew … I couldn’t find one. But I did use the question to probe the connections between Carlyle and DP World — publish about 8 am Eastern.
Kathy
Kathy,
you’ll see news soon with regards to CMA’s Frenchness and Carlyle will waste no time with their enormous lobby machine. Whats interesting is that a Frecnh firm (CMA) and Canadian (Brookfield assets) were allowed in as minority partners, yet Australian Macquarie (NY LLC) and Japanese Shipping lines were turned away. I can’t see the MTC/Brookfield consortium or the Highstar group being able to match the bids that Carlyle can offer or the deal for business CMA CGM can offer at DP Worlds 52 terminals world-wide. The remaining invest fund seems to be a wild card and more politically positioned should things go unplanned.
Kind Regards
So there was no problem with a British company owning the ports but there is with a UAE company.
Of course this has nothing to do with racism/xenophobia does it?
A British comapny never owned US ports, the ports are the property of state and municipal governments. P&O Ports, like Maersk, Hutchinson, et al were tenants.
Hi, Andrew!
I’ve been away at a conference in Texas … any news? Or they waiting til Wednesday, when America has turned collective eyes towards turkey day?
Kathy,
No real change or new news to report. Some senate members addressed the sale update on Monday, with one associate advising the sale and bidding process should be completed prior to Christmas, a bit delayed from previous extension.
There had been some minor news on CMA CGM, and their preferred interest in US West coast terminals and Carlyle/SSA attempt to out bid the Morgan Stanley/CMA-CGM consortium.
All eyes on Deutsche Bank as they round up the 5 bids from the 6-8 total firms. The call here remains Carlyle/SSA.
Interstingly, the sale of OOIL is reported to be completed. Either Macquarie Bank funds, Brookfield funds (also bidding on DP World US operations) or Goldman Sachs sourced to be to have acquired the 4 terminal assets.
The US ports saga should soon be over, and in the end, politics interferes with Capitalism….
Cheers
Final bids have been submitted to Deutsche Bank and are being reviewed in Abu Dhabi by senior Dubai Ports World board members. Folks close to the sale are anticipating bids to fall in the range of $850m to $1.2b. The Carlyle Group is the likely front-runner and is speculated to have a tabled quite an offer. There may be some unofficial announcement later this week. All indications are for the Consortium of Carlyle and Carrix to assume those US assets up for sale. But stay tuned as stranger things have happened in this “ports row”
Cheers
Andrew, do keep us informed. Anxiously awaiting more news.