Dubai defies US rebuff

24 March 2006
Dubai government investment company Istithmar will continue to look at opportunities in the US despite the recent controversy surrounding Dubai-based DP World's $6,890 million acquisition of UK-based port and ferry operator P&O. DP World has been forced to sell P&O's six US ports due to US political opposition to the deal.

'We hope the DP World [row] is a blip,' said Istithmar chief investment officer David Jackson on 20 March. 'We will continue to make commercial decisions, not political ones. If we see an opportunity in the US or UK, we will pursue it in the interests of our investors. It's not a good idea for a country to signal it's not open to business.'

Istithmar's January acquisition of Inchcape Shipping Services from UK-based Electra Private Equity for $285 million has not been affected by the DP World dispute, Jackson said. Inchcape's customers include the US Navy, which it provides with shore services in the Middle East. 'There's no threat to the Inchcape deal in the meantime,' said Jackson.

However, another Dubai government investor, Dubai International Capital (DIC), is awaiting the outcome of a US government review of the acquisition of nine defence manufacturing plants in the US as part of its $1,200 million deal to buy UK-based defence contractor Doncaster Group from Royal Bank of Scotland. 'We are co-operating [with the review]. We've got our fingers crossed,' said DIC chief executive officer Sameer al-Ansari. The US plants manufacture parts for military vehicles and account for 2 per cent of Doncaster's assets. The US Committee on Foreign Investment is due to complete its inquiry by the end of April.

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