Dubai Ports sells U.S. operations to AIG

Deckhead goes right here

THE ASSOCIATED PRESSDecember 12, 2006 

WASHINGTON - Dubai Ports World, the company whose planned takeover of major U.S. port operations ignited a political firestorm earlier this year, has agreed to sell those operations to AIG Global Investment Group.

The company announced the deal Monday. The U.S. operations at six major U.S. seaports in New York/New Jersey, Philadelphia, Baltimore, Miami, Tampa and New Orleans were valued at approximately $700 million, but DP World did not disclose the sales price.

The deal also involves stevedoring operations in 16 locations along the eastern seaboard and Gulf Coast and a passenger terminal in New York City.

"While we are disappointed to be exiting the U.S. market, the price we received was fair," Sultan Ahmed Bin Sulayem, the chairman of DP World, said in a statement announcing the deal.

One of the loudest critics of the original deal said he was pleased and expected the deal to clear the few regulatory hurdles that remain.

"This is an appropriate final chapter to the book on the Dubai Ports World deal," said Sen. Charles Schumer, D-N.Y. "This is very likely to receive broad support in Washington and throughout America."

AIG Global Investment Group is an asset management firm with more than $635 billion in assets. Its parent company is the New York-based insurance firm, American International Group Inc. AIG's managing director Christopher Lee said the company is "very committed to ensuring that it continues to be one of the industry leaders in setting standards for port security."

DP World is based in the United Arab Emirates and is the largest marine terminal operator with 51 terminals in 24 countries.

The sale still requires regulatory approval from several port authorities, including New York and New Jersey. The sale is expected to close in the next few months, DP World said.

The Bush administration had agreed last January to allow DP World to acquire the U.S. port operations, but as soon as the deal became public they were fiercely attacked by members of both political parties.

Critics of DP World cited the UAE's history, noting that some of the money that financed the Sept. 11 terror attacks moved through their banking system, and the government's past support of Afghanistan's Taliban government before the 2001 attacks.

As a result of the public pressure, DP World ultimately agreed to sell off the U.S. assets.

The Department of Homeland Security, which had tried to defend the initial DP World acquisition, had no comment Monday, agency spokesman Russ Knocke said.

Massachusetts Democrat Ed Markey, who sits on the House Homeland Security Committee, pledged his party would keep a closer eye on such deals in the future by conducting "the type of oversight that has been completely absent during the Republican Congress."

Sultan Ahmed Bin Sulayem, chairman of DP World


No change locally

GULFPORT - P&O Ports North America, the subsidiary of DP World which was sold, handles cargo at the state port at Gulfport, but the concerns about Dubai connections and security don't apply here.

"Here, we know them strictly as a stevedoring services providers," State Port Executive Director Don Allee said. "... They've never had oversight of gate management or security responsibilities, anything of that nature."

He said his conversations with company representatives indicated there will be no changes in the company's presence here. P&O is one of two licensed stevedore companies at the port. Stevedore Services of America, based in Seattle, is the other.

The port contracts with Swetman Security Service, a local company, for its security services. "While we are disappointed to be exiting the U.S. market, the price we received was fair," Sultan Ahmed Bin Sulayem, the chairman of DP World, said in a statement announcing the deal.


DON HAMMACK

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