Neither Ports America nor owner Oaktree Capital will discuss a possible sale of the nation’s largest port terminal operator, but Yildirim Holdings President Robert Yildirim said talks have advanced to the “second round.”
Neither Ports America, the nation’s largest port operator, nor its owner, Oaktree Capital, will comment on reports that Turkey’s Yilport Holding Inc. is bidding to purchase a majority stake in the company.
Lloyd’s List, however, said last Friday Yildirim Holdings President Robert Yildirim told the maritime news outlet the Istanbul-based firm is currently in the second round of the sales process for Ports America.
Robert Yildirim, whose company is also a major investor in the French ocean carrier CMA CGM, could not be immediately reached, but Yilport posted the Lloyd’s List story on its website, and a spokesman from Yildirim told American Shipper in an e-mail, “In brief, what was published this week in Lloyd’s List is true, and our company is interested in Ports America.”
Yildirim “made it clear he would not accept anything less than a 51 percent shareholding in Ports America, and could be willing to buy 100 percent control if the price were right,” according to the Lloyd’s List report.
Ports America is the largest terminal operator and stevedore in the United States, operating in more than 42 ports and 80 locations.
“I want to be in the driving seat so that I can make all the necessary investments in terms of equipment, infrastructure, software and business relationships. In order to do that, I need to have majority control,” Yildirim told Lloyd’s List.
Yilports is an expansion-minded unit of the family-owned Yildirim Group of Companies, also based in Istanbul. In addition to port management, the Yildirim Group is involved in chrome ore mining and trading, ferrochrome production and trading, coal trading, fertilizer production and trading, shipping and shipbuilding.
On May 2, Yilport increased its ownership of Gävle Container Terminal in Sweden’s third largest port to 100 percent from the 80 percent share it has held since 2014. In February, Yilport acquired Portugal-based port and logistics group Tertir and signed an agreement to build a marine terminal in Ecuador.
Lloyd’s List said Yildirim is the only industrial company in the running to make a Ports America acquisition, and indicated that the other bidders are all believed to be financial institutions.
In 2006, Dubai Ports World announced plans to buy P&O Ports, including its U.S. operations, the stevedoring business that was the kernel to today’s Ports America.
Strong political opposition in the U.S. resulted in DP World dropping plans to acquire the U.S. port operations from P&O, even though then-president George W. Bush said of DP World, “This is a company that has played by the rules, that has been cooperative with the United States, a country that’s an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through.”
Ashley Craig, a Washington-based attorney, said that DP World dropped its planned purchase of P&O Ports had even though it had passed muster with the Committee on Foreign Investment in the United States (CFIUS).
However, concerns about terrorism and a political outcry that united politicians as disparate as Sen. Chuck Schumer, D-N.Y. and Rep. Peter King, R-N.Y. from Staten Island, eventually caused DP World to walk away from the deal.
Instead, the U.S. port operations of P&O Ports were sold to Highstar Capital, then affiliated with the insurer American International Group in 2007. Highstar eventually combined Ports America with San Francisco-based Marine Terminals Corp.
Based in a parliamentary republic, albeit one with an overwhelming Muslim population (99.8 percent according to the CIA World Factbook), it’s unclear if Yilports might face opposition similar to that which prevented DP World from acquiring Ports America’s predecessor.
Gulftainer, also based in the UAE was able to open a container terminal in Port Canaveral, Fla. last year.
Canaveral Port Director John Walsh said in 2014 he was been notified by the Treasury Department that the concession agreement with Gulftainer was considered a simple lease, not an asset sale, and did not warrant further review on national security grounds.
The Gulftainer terminal in Port Canaveral barely caught any attention in Washington, in stark contrast to the 2006 political controversy over DP World.
American Shipper was unable to find out immediately if the Yilports deal is being reviewed by the CFIUS.
Craig said the CFIUS process is both voluntary and confidential, but he expects Yilports or any foreign company seeking to buy a port business would seek CFIUS approval given DP World’s difficult experience. He said what happened to DP World was atypical because it became so political.
In the case of Yilports, Craig said he thought any review would probably be chaired by representatives from the Department of Homeland Security and Department of Defense, and that nearly a dozen other federal agencies would likely be involved in the the process as well.
If such as deal does not go into a secondary evaluation, the CFIUS review takes 45 days. If a national security concern is raised, a review can take an additional 90 days, said Craig. He said once a deal is approved through the CFIUS process it cannot be unwound by the federal government after the deal is done by citing a national security concern.
Reached for comment, a spokesperson for the U.S. Department of Treasury said, “By law, information filed with CFIUS may not be disclosed by CFIUS to the public. Accordingly, the Department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review.”
Turkish firm in the running to buy controlling interest in Ports America?
