CSX sells port arm to Dubai Ports for $1.15 billion

CSX sells port arm to Dubai Ports for $1.15 billion CSX Corp. said it is selling its final international port and maritime-related activity, CSX World Terminals, to Dubai Ports International for $1.15 billion. The sale is expected to be completed in the first quarter of 2005.
   The acquisition will make Dubai Ports the sixth-largest port and terminal operator in the world, according to CSX. As part of the deal, Dubai Ports will acquire all the international terminal business of CSX World Terminals, comprising interests in nine terminals with 24 berths and a combined future capacity of 14.6 million TEUs.
   The existing terminals operated by CSX include those located in Hong Kong, Tianjin and Yantai in China and operations in Australia, Germany, the Dominican Republic and Venezuela. CSX also has a 25-percent stake in the new terminal at Busan Newport due to commence operations in 2006, with an expected capacity of 5.5 million TEUs. In addition, CSX World Terminals has interests in logistics businesses in Hong Kong and China, which are all included as part of the acquisition.
   Dubai Ports owns, operates and manages container terminals and ports at Jebel Ali, Port Rashid, Visakhapatnam, Jeddah, Djibouti and Constantza. The company also manages the free zones of Port Kelang and Tangier through a sister company.
   The purchase of the CSX port business represents Dubai Ports’ entry in the much sought-after Chinese port market. The inclusion of the Chinese and Hong Kong terminals in the sale may explain the high price obtained by CSX for its port activities.
   Drewry Shipping Consultants recently ranked Dubai Ports as tied for eighth-largest global terminal operator. For 2004, Dubai Ports is projected to handle more than 7.8 million TEUs. It is planning to increase capacity to more than 20 million TEUs over the next decade, CSX said in a statement.
   “This is a major step in Dubai Ports International’s global expansion strategy. The acquisition will give Dubai Ports International an important platform in the North Asia region, notably in Hong Kong, China and Korea and further expands our global network in Europe,” said Sultan Ahmed Bin Sulayem, Dubai Ports’ executive chairman.
   By selling its terminal operations, CSX will have completed its divestiture from the ocean-shipping market after selling Sea-Land Service’s liner shipping business and U.S.-based terminals, and CSX Lines. The sale of Sea-Land’s international liner business to A.P. Moller-Maersk in 1999 raised about $800 million.
   Michael Ward, chairman of CSX, said the transaction was “another important step in our continuing efforts to focus on the North American railroad business.”