Abu Dhabi Ports Co., which operates 10 ports and terminals in the UAE, agreed to buy a controlling stake in Dubai-based Global Feeder Shipping (GFS) for $800 million as part of plans to scale up its operations, Bloomberg reported.
The port operator is controlled by the sovereign wealth fund ADQ.
Through the purchase, Abu Dhabi Ports will acquire an 80 percent stake in GFS, according to a statement.
The transaction will be fully funded through a loan. GFS’ existing management will “remain in place with the founders retaining a 20 percent stake,” Bloomberg said.
“The acquisition will further strengthen the company’s hub and spoke model by linking core markets in the Gulf, Indian Subcontinent, Red Sea, and Turkey to its key port assets, such as Khalifa Port,” AD Ports said.
As per the report, the acquisition is Abu Dhabi Ports’ largest external investment and its first major deal in neighboring Dubai, where DP World Ltd., one the world’s largest port operators, is based. Established in 2006, the firm went public in January, raising $1.1 billion from an initial public offering.
AD Ports said it will look further to integrate GFS into its maritime cluster, which offers shipping, offshore and subsea services.
“Integrating GFS into our operations will enable us to increase our customer base, broaden our global footprint and build upon this significant momentum,” AD Ports’ chief executive officer Mohamed Juma Al Shamisi said.
GFS, which owns and operates 26 vessels with a total capacity of 72,500 twenty-foot equivalent units, provides services that connect the UAE to India, Pakistan, Sri Lanka, Egypt, Sudan, Djibouti, Yemen, Saudi Arabia, Bahrain, China, South Korea, Vietnam and others.
Citigroup Inc. advised AD Ports on the transaction, Bloomberg said.
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