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Abu Dhabi, UAEFriday 21 September 2018

DP World completes $315.7m acquisition of Peru's Cosmos Agencia Marítima

The deal in Peru will give the world's fourth largest port operator a firmer foothold in the market 

DP World has successfully closed the $315.7m acquisition of Cosmos Agencia Marítima in Peru. Courtesy DP World
DP World has successfully closed the $315.7m acquisition of Cosmos Agencia Marítima in Peru. Courtesy DP World

DP World successfully closed the $315.7 million (Dh1.16 billion) acquisition of Cosmos Agencia Marítima in Peru as the world’s fourth-biggest port operator continues to consolidate its position in the Latin American market.

“Latin America is a very important market for us and this move adds value for our customers in the region,” DP World group chairman and chief executive, Sultan Ahmed bin Sulayem, said. “The acquisition underlines the confidence we have in Peru and the potential of its economy.”

In March, the Dubai-listed company announced an agreement with Andino Investment Holding to fully acquire logistics services business Cosmos. The deal includes 100 per cent of the shares in Triton Transports and Neptunia, and 50 per cent stake in Terminales Portuarios Euroandinos in the Port of Paita, which is the second largest container terminal in Peru, according to a DP World statement.

The move is in line with the company’s plans to expand its geographical footprint and consolidate its presence in strategic markets. DP World in March also partnered with India’s government-controlled National Investment and Infrastructure Fund to buy a majority stake in an Indian logistics and warehousing firm, as part of $3 billion spending plans for Asia’s third-largest economy.

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DP World, which last year acquired two state-owned maritime entities in Dubai for $405m, is looking to diversify its revenue stream by expanding into businesses related to its core ports operations. The company expects to spend about $1bn every year for the next three years as it boosts investments, adds capacity and acquires new assets in the UAE and beyond, Mr bin Sulayem told The National in January.

The acquisition in Peru will give DP World a firmer foothold in the market by adding another container terminal to the existing terminal at Callao as well as integrated logistics services including warehousing, distribution and cargo handling.

“The acquisition diversifies the revenue of our business through a wider range of logistics services,” Gerard van den Heuvel, the CEO of DP World Peru, said. “We already operate the largest container facility in the country in Callao …. and this [deal] will enhance our services even further.”

As part of solidifying its presence in South American markets, the Nasdaq Dubai-listed company snapped up a further 66.67 per cent stake in Brazil’s Empresa Brasileira de Terminais Portuários (Embraport) in December, making it the sole owner of the largest private multi-modal port terminal in Latin America's largest container port.

It already held a stake in Embraport through a partnership with Brazil-based Odebrecht Transport, but bought its partner out following approvals from Brazil’s anti-trust regulator.

Ecuador is the next South American market on the company’s radar, it said in April. Aside from its UAE home market, South Korea, Mozambique and Egypt are among the other key jurisdictions where the port operator plans to invest during the course of the 2018.

DP World remains on track to expand this year after first-quarter volumes increased, despite some volatility, on the back of geopolitical headwinds in some regions where it operates, Mr bin Sulayem, said in April. “We still expect to grow ahead of the market and see increased contributions from our new investments.”

The company, reported consolidated throughput rise of 6.6 per cent to 9.2 million twenty-foot equivalent container units at its terminals during the first three months of the year. Gross container volumes increased 7.3 per cent on a reported basis to 17.6 million TEUs, compared with 16.4 million a year earlier, led by growth in Europe, Middle East and Africa.

However, despite good showing in Africa, the state-owned company has faced a series of difficulties in its African operations this year where it became involved in legal challenges to its investments in Djibouti and Somaliland. That hasn’t deterred DP World from investing in Africa, where it remains bullish on the market’s growth potential. It announced in March it would invest $1.2bn in the deep-water Port of Banana in the Democratic Republic of Congo.

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