Caisse to buy minority stake in 3 DP World assets in UAE for US$5 billion

The Caisse de dépôt et placement du Québec is buying a minority stake in three DP World assets in the United Arab Emirates for US$5 billion.

The Quebec pension fund manager will invest US$2.5 billion in Jebel Ali Port, Jebel Ali Free Zone and National Industrial Park through a new joint venture in which it will hold a stake of around 22 per cent. It will finance the rest of the deal with debt.

Other long-term investors will have the opportunity to also acquire a stake of up to US$3 billion.

In a news release, the Caisse says the transaction implies a total enterprise value of about US$23 billion for the three assets.

The port of Jebel Ali is touted as the second largest outside of Asia, located to serve the trade corridor linking West and East through its connections to 150 cities around the world. The Jebel Ali Free Zone is the largest in the Middle East, with companies from 140 countries, including 150 Fortune businesses.

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DP World chairman and CEO Sultan Ahmed Bin Sulayem says the transaction reduces its leverage amid the pandemic and recent global economic conditions.

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“Today, we are pleased to deepen our long-standing relationship with a world-class logistics and supply chain operator by investing in this strategic trade infrastructure, one that will play a pivotal role in the evolution of the global economy,” adds Emmanuel Jaclot, head of infrastructure at the Caisse.

The partnership with DP World involves 18 terminals in four continents.

The first tranche of the transaction, for US$5 billion, is expected to close in the second or third quarter of 2022, and the closing of the second tranche, up to US$3 billion, is expected to occur in the fourth quarter of 2022.