Dubai presses on with port takeover despite US vote

By Dayan Candappa

DUBAI (Reuters) – Dubai Ports pressed ahead on Thursday
with a takeover that gives it control of six major U.S. ports
despite a Congress committee vote to block the deal.

Government and company officials in the United Arab
Emirates declined comment on Wednesday’s vote by U.S. lawmakers
to block the deal on the grounds that handing the ports over to
a Gulf Arab state-owned firm would threaten U.S. national
security.

But sources familiar with the deal said the vote had not
taken Dubai Ports any closer to relinquishing the six ports at
the center of a political firestorm.

“The vote in the House of Representatives has not changed
anything in that respect. We are not at that point,” one
Dubai-based source said.

Dubai Ports said on Thursday it had completed the
acquisition of P&O, adding that it hoped the U.S. review of its
operations would be resolved soon.

“A review of our operations in the United States continues
and we look forward to a timely resolution of any issues. We
will continue to hold our U.S. operations separate while this
process continues,” Mohammed Sharaf, DP World’s chief
executive, said in a statement.

The statement said P&O shares have been delisted.

DUBAI: NO PLANS TO SELL

The Web site of Britain’s Financial Times newspaper
(www.ft.com) had reported that private equity groups had
approached DP World about buying its U.S. operations.

DP World’s Sharaf told the newspaper in an interview
published on Thursday that his company would not consider
selling its U.S. operations.

One source in Washington said Dubai Ports had no plans to
sell its newly-acquired U.S. operations.

“DP World has received lots of approaches but is not
considering any such options,” the source, close to the firm,
said.

Analysts said the political furor was bound to provoke
businesses in the world’s biggest oil exporting region, which
is an increasingly important source of financing for the huge
U.S. current account deficit.

“It’s American double standards. Do you think that
businesses and governments here won’t react and even
retaliate?” said Wadah Al Taha of the National Bank of Abu
Dhabi.

He said the issue was likely to feature prominently in
trade talks later this month between the United States and the
UAE, a federation of seven emirates that includes Dubai.

The Dubai Ports row has reinforced fears in the Middle East
that investments in the United States have become politically
risky for Arabs and Muslims. Some Arabs say the U.S. opposition
to the deal smacks of racism.

Some U.S. politicians say the UAE has in the past been
sympathetic to Islamist militants, noting that two of the
September 11 hijackers came from that country.

President George W. Bush, however, says the UAE is a
staunch ally in the U.S. war on terrorism and he has vowed to
veto any legislation that would block the ports deal.

Wednesday’s 62-2 vote, by the House Appropriations
Committee, will be followed next week by another vote by the
full House of Representatives.

Dubai Ports officials said they were pushing ahead with
plans to integrate British ports group P&O which runs the U.S.
ports. A Dubai Ports spokesman said the company would soon
announce the de-listing of P&O now that shareholders had
approved the $6.8 billion takeover.

Dubai Ports Chairman Sultan Ahmed Bin Sulayem and Sharaf
fly to London this week to discuss integration of the two
companies which make up the world’s third largest ports group.

(Additional reporting by Jeremy Pelofsky in Washington)