WASHINGTON – A Dubai-owned company said Wednesday it plans to sell all its U.S. port operations within four to six months to an unrelated American buyer and laid out new details about how it plans to pursue the sale under pressure from Congress.
DP World said that until the sale is finalized, its U.S. businesses will be operated independently. The announcement was the first time DP World described its plans for the U.S. operations as a "sale" and indicated it would retain no stake in them.
"An expedited sale process is under way and with the cooperation of the port authorities and joint venture partners, it is expected that a sale can be agreed within four to six months," the company said in a statement.
DP World said it will provide information about its business to "interested parties," which it did not identify, and said it will assess offers based on what it described as "value, deliverability and the continuity of management, employees and customers."
The new disclosures by DP World responded to questions raised since its announcement last week about how it intends to transfer to an unspecified American company all the U.S. operations it acquired when it bought London-based Peninsular and Oriental Steam Navigation Co. for $6.8 billion.
The British company handles significant operations at ports in New Jersey, New York, Baltimore, New Orleans, Miami and Philadelphia — plus lesser dockside activities at 16 other ports in this country.
DP World has said those U.S. operations are worth roughly $700 million.
"This is the first time we have gotten clarification that the intent is for full divestiture," said Sen. Charles Schumer, D-N.Y. "While I still have to look at the details, it looks now like they have fleshed this out in far greater detail," said Schumer, who said he was assured "the process be open and fair and quick."
"That is very good news. That's what we have been seeking from the beginning," he said.
At the White House, moments before DP World's announcement, spokesman Scott McClellan said company executives had earlier promised to transfer their U.S. businesses, "and it's important that they fulfill the commitment that was made."
"They have expressed that they are fully committed to doing so, and the Treasury Department said that they would work with them on implementing that decision," McClellan said.
DP World said until the sale is complete, its U.S. operations will be managed independently by P&O Ports North America Inc., the wholly owned U.S. subsidiary of the British company it bought.
Since DP World's announcement last week, Republicans and Democrats alike in Congress have questioned whether the company planned a full divestiture or whether it would retain some stake in the U.S. operations.
DP World said previously that its decision last week was based on an understanding it would be given time for an orderly transfer and that DP World will not suffer economic loss.
But until Wednesday, it had steadfastly declined to clarify its statement or the timing of any possible sale. Leading congressional critics threatened repeatedly to intervene if DP World's plans fell short of a full divestiture of its U.S. operations.
DP World said Wednesday it hired Deutsche Bank Securities Inc. of New York as its financial adviser for the sale. It also hired a prominent New York law firm, Sullivan & Cromwell LLP, for legal advice and said it will continue relying on the Alston & Bird LLP law and lobbying firm in Washington for help with U.S. regulatory issues.
President Bush had strongly defended the ports deal, saying the United Arab Emirates is a valuable ally in the fight against terrorism.
Many lawmakers, both Republicans and Democrats, pointed to the UAE's role as an operational and financial base for hijackers in the attacks on Sept. 11, 2001, and said they opposed allowing a company owned by a foreign government to run operations at ports vulnerable to terrorist attacks.
Questions about the divestiture intensified during the weekend, when Senate Majority Leader Bill Frist said DP World could be permitted to operate and manage some U.S. ports if no suitable American buyer were found and if the Bush administration determined there were no security risks.
But Sen. John Warner, chairman of the Armed Services Committee, said during the weekend, "the deal is over" and said the company's intent "looks like in every respect a total divestiture."
Warner, R-Va., has acted as an important go-between for DP World and the administration. He previously announced the company's offer to submit to an unusual, broader security review over the deal and then last week, in the full Senate, announced its decision to transfer its U.S. operations.
DP World previously agreed it will not control or manage any of the U.S. port operations it acquired until May 1 or until the outcome of the unusual, broader security investigation into the ports deal by the Bush administration.
That review is pending.