DP World re-acquires UK-based P&O Ferries for £322m
P&O Ferries and its logistics operation P&O Ferrymasters operate across Europe
Dubai's global ports operator DP World re-acquired UK-based transport and logistics company P&O Ferries for £322 million (Dh1.5 billion) as it seeks to expand into shipping-related sectors.
The acquisition is expected to close in the first half of the year, DP World said on Wednesday. The purchase is expected to be earnings-accretive in the first full year of consolidation and to meet DP World's return targets.
"We are pleased to announce the return of P&O Ferries back into the DP World family," DP World chairman Sultan bin Sulayem said. "This transaction is in line with our strategy to grow in complementary sectors, strengthen our product offering and play a wider role in the global supply chain as a trade enabler."
In 2006, DP World acquired P&O, which included P&O Ferries, but sold the ferry and shipping operator to its majority shareholder Dubai World, the emirate's holding company, before DP World went public in 2007 as it focused on container terminal operations.
As DP World's growth strategy has evolved to include the wider supply chain, it added P&O Ferries back to its portfolio. A DP World spokesman confirmed to The National on Wednesday that the company bought the asset back from Dubai World.
The transaction is the latest sign of DP World's global expansion drive and push into shipping-related business following its €660m (Dh2.75bn) acquisition of Danish port-related logistics company Unifeeder last year.
P&O Ferries' logistics business consists of roll-on roll-off (Ro-Ro) ferries operation and the European transportation and logistics solutions provider P&O Ferrymasters.
It operates a fleet of 21 vessels on the coastal, North Sea and Irish Sea sectors across 11 ports while P&O Ferrymasters provides supply chain solutions in 19 European locations.
P&O Ferries handles more than 2.5 million freight units per year, which accounts for approximately 75 per cent of group revenue. It reported full-year 2017 revenue of $1.4bn and earnings before interest, tax, depreciation and amortisation of $131m.
"The transaction offers compelling value strategically and financially, and we look forward to P&O Ferries contributing to driving shareholder value in the coming years," Mr bin Sulayem said.
DP World, among the world's five largest port operators, last week hit out at the damaging uncertainty of the prolonged British wrangling over the country's exit from the European Union.
Mr bin Sulayem said that the failure so far to strike a Brexit deal was frustrating for businesses.
"Our problem is the indecisiveness of the government," he said.
"We don't care as businessmen whether they have Brexit, or Brexit with an agreement, or Brexit with a good agreement, or Brexit with a bad agreement. Once they decide, as businessmen, we are capable of running our business once all this basically indecisive environment disappears."
DP World has two terminals in the UK, at the deep-sea ports of Essex-based London Gateway and Southampton on the south coast.
Updated: February 20, 2019 06:45 PM