DP World closes €660m acquisition of port-related logistics company Unifeeder
The Dubai-based company said in August that the purchase of the Danish operator would be financed from its balance sheet resources
DP World said on Thursday it had closed the €660 million (Dh2.75 billion) acquisition of Danish port-related logistics company Unifeeder, the Dubai-based company's first purchase of its kind, as the world's fourth-largest port operator expands into shipping.
DP World said in August that the acquisition would be financed from its balance sheet resources and would boost earnings in the first full year after the completion of the takeover.
“This transaction is very relevant to our business and provides future growth opportunities, especially that feedering and shortsea/regional transports with smaller vessels have become more important for shipping lines with the use of larger vessels by shipping alliances,” said Sultan bin Sulayem, chairman and chief executive of DP World. “Our core business is and will continue to be the container terminal, but this acquisition fits with our strategy to diversify our revenues and extend our core business to play a wider role in the global supply chain.”
DP World has been on an acquisition spree this year, buying assets and signing concession agreements to help diversify its revenue and expand its business segments.
Founded in 1977, Unifeeder has an extensive feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports, the DP World statement said. A feeder network links ports with the objective of consolidating or redistributing freight to or from a deep sea service in one of those ports. A shortsea network relates to the transport of goods over relatively short distances, as opposed to the intercontinental cross-ocean deep sea shipping.
The Danish company reported €510m in revenues in 2017.
Unifeeder operates approximately 60 short-term chartered vessels, carrying around 3.2 million twenty-foot equivalent units – the measurement for container volumes - and making some 12,000 port calls annually.
DP World reported a decrease in shipping container volumes in the third quarter of 2018 due to a challenging macro-environment, loss of lower margin cargo and softer volumes in the UAE.
The company handled 18 million TEUs across its global portfolio in the three months to September 30, a 0.5 per cent like-for-like decline from a year earlier.
Like-for-like volumes do not include new capacity additions from DP World’s interests at the ports of Berbera, Limassol, Paita, Doraleh and Saigon.
Updated: December 6, 2018 04:07 PM