Wide interest in Dubai's US ports sale

Close to 100 companies have expressed an interest in buying facilities at major US ports from Dubai Ports World, a source close to the sales process said today.

Dubai Ports World, which is owned by Dubai of the United Arab Emirates, bought the facilities at six US ports earlier this year as part of its US$6.8 billion ($11.01 billion) purchase of Peninsular & Oriental Steam Navigation Company of Britain.

But Dubai Ports World later said it would sell the US assets to a US entity, after American lawmakers said they had security concerns about the deal.

Among the companies expressing interest in buying the US port facilities are port operators, private equity funds, infrastructure funds, shipping companies and logistics firms, said the source, who spoke on condition of anonymity.

Potential buyers include some of the same firms that are said to be considering buying SSA Marine Inc. of Seattle, a unit of Carrix Inc. and the largest US-owned port terminal operator, the source said. He did not elaborate.

The US port management business is highly fractionalised. While some private companies operating terminals are American corporations, many are non-US businesses that operate terminals worldwide or are affiliated with foreign flag steamship lines that carry cargo.

Earlier this year, SSA Marine, Maher Terminals Inc. of Berkeley Heights, New Jersey, and Marine Terminals Corp. of Oakland, California were seen as potential buyers of the Dubai Ports World assets, according to ship brokers.

Bob Watters, a spokesman for SSA Marine, declined to comment. Spokesmen for the other two companies could not be reached for comment.

The source could not say how soon the sale of the US port assets acquired by Dubai Ports World would be completed.

Dubai Ports World representatives declined to comment on the sale process, as did a spokesman for Deutsche Bank in New York, which is financial adviser for the deal.

Dubai Ports World said in March that it would sell its US port operations within four to six months to a US entity. Meanwhile its US operations are being managed separately from Dubai Ports World.

The port operations for sale are in New York, New Jersey, Philadelphia, Miami, Baltimore and New Orleans.

Port operators have become attractive investments due to their stable income streams, large property portfolios and growth linked to Chinese trade.

The row over Dubai Ports World has led to closer scrutiny of all foreign takeovers of US assets, and legislation is pending on Capitol Hill to reform the way the US government regulates the deals.

Another Dubai-owned company, Dubai International Capital, has acquired assets in the United States since the Dubai Ports World controversy. The Bush administration in April approved Dubai International Capital's purchase of Doncasters, a British engineering company with US plants that supply the Pentagon.

- REUTERS