DP World Limited (DP World) and its wholly owned subsidiary, DP World FZE, have entered into an agreement on the proposed acquisition of Economic Zones World FZE (EZW) for a total cash consideration of USD 2.6 billion.
EZW is a provider of industrial and logistics infrastructure, which comprises five business units: Jebel Ali Free Zone FZE (JAFZ), JAFZA Enterprises FZE, EZW Corporate, Business Center World FZE, and Emerging Business Units.
JAFZ, EZW’s primary business unit representing 97 per cent of revenue and operating profit for the year ended 31 December 2013, is a 57 square kilometre modern commercial and industrial logistics park adjacent to DP World’s flagship Jebel Ali port in Dubai. The free zone is an integral component of the supply chain for DP World’s customers at the Jebel Ali port.
Sultan Ahmed Bin Sulayem, Chairman of DP World, said:
“The acquisition of EZW represents a strategic and commercial opportunity that will benefit our customers as well as our Company. Jebel Ali Port and Free Zone support and drive the growth of Dubai and the wider region of some two billion people.
Together, we will be able to offer seamless supply chain services to shippers and shipping lines, linking sea, road and air across the port and the free zone to the new Al Maktoum Airport via the Dubai Logistics Corridor to help them further improve efficiency. This will allow us to enhance our position as the leading logistics hub in the Middle East region, accelerate growth and deliver shareholder value.”
DP World said it intends to fund the consideration for the proposed acquisition, its related costs and expenses, and the ongoing operations of the enlarged DP World from existing cash resources and existing committed conventional and murabaha term loan and revolving facilities.
DP World is required to obtain prior approval from its shareholders pursuant to the UK Listing Rules. An Extraordinary General Meeting will be held on 18 December 2014, when a shareholder resolution will be proposed, authorising the Board to proceed with the acquisition.
If the shareholders approve the acquisition, DP expects that the transaction will be completed during Q2 2015.
In addition, DP World is separately seeking approval from its shareholders to delist DP World’s shares from the London Stock Exchange (LSE). DP World said it would maintain its NASDAQ Dubai listing.
A key driver for obtaining the London listing in 2011 was to allow investors, who at that time were unable to invest in DP World through NASDAQ Dubai, access to DP World through an alternative stock exchange.
“However, having monitored the situation closely, the directors of DP World believe that a significantly higher number of international investors are able to invest in shares listed on NASDAQ Dubai and as at 30 September 2014, approximately 99 per cent of DP World’s shares were held by individuals and institutions investing through the NASDAQ Dubai listing,” DP said.
It is anticipated that the delisting will take effect on or about 21 January 2015.