- The Washington Times - Monday, December 11, 2006

DP World announced yesterday that it will sell its terminal operations at seven major U.S. seaports to an American company, bowing to pressure from Congress.

The global marine terminal operator, based in Dubai, United Arab Emirates, said it reached an agreement Sunday to sell P&O; Ports North America to a subsidiary of AIG Global Investment Group, a division of insurance giant American International Group. Terms were not disclosed.

P&O; Ports North America operates cargo port terminals in Newark, N.J., Philadelphia, Baltimore, Miami, New Orleans and Tampa, Fla. It also runs a passenger terminal in New York City and stevedoring facilities in 16 locations along the East and Gulf coasts.

Five to eight companies, all based in the United States, were selected by DP World to submit bids for the U.S. properties, the company said. DP World said earlier this year that its American properties are worth about $700 million.

DP World acquired terminal operations at six of the ports in March when it purchased Peninsular and Oriental Steam Navigation Co., a British company that had owned P&O; Ports North America Inc. since 1999. The Dubai company later added Tampa to its U.S. holdings.

The Bush administration approved of the $6.8 billion purchase, but the sale spurred outrage from members of Congress who worried that foreign ownership of U.S. port operations, particularly from an Arab state-owned company, would compromise security. DP World then agreed to find an American buyer for its U.S. operations.

Sen. Charles E. Schumer, New York Democrat, a vocal critic of the Dubai company running U.S. ports, said yesterday that he was pleased with the proposal.

“This is an appropriate final chapter to the book on the Dubai Ports World deal,” Mr. Schumer said. “The winning bidder should be a good partner for America’s commerce and security. … This transaction is happening in the broad light of day, where it should have been all along.”

AIG Global Investment Group, which manages more than $635 billion in assets, said the daily operations at the ports wouldn’t change.

“This is not like AIG buying a new business to run. This is AIG’s institutional investment arm making an investment,” AIG spokesman Chris Winans said.

“If you can buy an asset at an attractive price that promises an attractive return, that’s our goal — it’s not to go in and buy something that’s broke and fix it.”

How long AIG keeps the ports is uncertain, but “assets like this you don’t just flip,” Mr. Winans said.

Shares of AIG rose 65 cents, or 0.9 percent, to $71 on the New York Stock Exchange yesterday.

“While we are disappointed to be exiting the U.S. market, the price we received was fair. We are pleased that [P&O; Ports North America] will have a strong owner in AIG and wish them well for the future,” said Sultan Ahmed Bin Sulayem, DP World chairman.

DP World said it will continue to expand its operations globally. The company is one of the largest marine terminal operators in the world with a network of 51 terminals in 24 countries.

The transaction is subject to regulatory approvals, including from various port authorities, but does not require a vote from Congress. The acquisition, if approved, is expected to close during the first quarter of next year.

Brooks Oyster, executive director of the Maryland Port Administration, which operates the Port of Baltimore, said he approves of the proposed deal.

“This has been a long process, and it is good for all parties that it is finally moving forward,” he said. “We look forward to reviewing long-term investments in infrastructure with AIG in the near future.”

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