The $461m purchase of Maher’s Canadian terminal will allow the Dubai-owned port operator to increase its U.S. business.
DP World said Thursday that it has agreed to acquire Maher Terminal’s Fairview Container Terminal in Prince Rupert, British Columbia from Deutsche Bank.
The deal, which does not include Maher’s terminal in Elizabeth, N.J., would allow the company to participate in a bigger way in U.S. container trade after it was thwarted in an attempt to acquire terminals in the U.S. in 2006. About 60-70 percent of the imports moving through Prince Rupert are destined for the U.S.
The announcement comes just weeks after Prince Rupert announced plans to expand capacity of the terminal from 850,000 TEUs to 1.35 million TEUs.
“Fairview presents growth opportunity in a market with attractive and growing demand,” said the Dubai-based DP World, which has more than 65 terminals around the world.
The concession for the terminal DP World is buying runs to 2034 with an extension to 2056 after the completion of Phase 2.
DP World said it will pay 580 million Canadian dollars (U.S. $461 million) for the total outstanding stock of the Fairview terminal on a cash-free, debt-free basis subject to customary adjustments. The completion of the transaction is subject to approval by Canadian regulators and is expected to occur in the second half of 2015.
DP World currently owns the Centerm terminal in Port Metro Vancouver, and acquired the U.S. terminals of P&O ports in 2006, but was forced to sell them after a storm of political controversy. AIG Global Investment Group, purchased the business, which formed the foundation for Ports America, now owned by AIG Global successor Highstar Capital.
Stephen E. Flynn, director of the Center for Resilience Studies at Northeastern University and a leading authority on homeland security, said he thought it “unlikely that the DP World purchase of the Prince Rupert terminal will stir up much concern about port security on this side of the border. There is no real constituency within the US who will be adversely effected by the purchase who would have an interest in fanning these concerns.
“The U.S. should be concerned about the overall state of global cargo and port security which has remained virtually unchanged for 7 years despite the emergence of new threats such as those posed by cyber attacks on critical infrastructure,” said Flynn. “That being said, it should have no specific concerns about DP World’s purchase of the Prince Rupert terminal. As a company, it is an industry leader when it comes to integrating security into its operations. In terms of Prince Rupert, it’s operations will be governed by security standards established and maintained by the Canadian government that are nearly identical to those in place in the United States.
“Further, the ownership of the terminal will have no impact on who actually works with the cargo in Prince Rupert – that will be done by Canadian workers,” Flynn added.
The expansion of the Fairview terminal in Prince Rupert is expected to be completed in the first half of 2017, and DP World said it would “undertake feasibility assessments in relation to development of the lands intended for further expansion which could potentially increase the capacity to 2.45 million TEUs.”
Port Metro Vancouver also says there is a project evaluating expansion of Centerm to increase its current 900,000-TEU capacity to 1.5 million TEUs.
“The terminal also offers the highest productivity rates on the West Coast and an efficient rail link to the hinterland,” said Mohammed Sharaf, chief executive officer of DP World. “The long-term concession and ability to build beyond the current phase 2 of expansion presents a fantastic opportunity for DP World.”
Maher’s terminal in Elizabeth has about 2.4 million TEUs in capacity. Deutsche Bank has classified it as a “legacy asset” held within its non-core operations unit.
“We are committed to reducing Deutsche Bank’s non-core legacy positions in a capital efficient manner,” said Pius Sprenger, head of the Non-Core Operations Unit at the bank.
DP World buys Prince Rupert container terminal
