“Dubai Ports World has said those U.S. operations are worth about $700 million”

Thursday, March 16, 2006
The Los Angeles Times reports the following:

“Dubai Ports World said that until a sale was finalized, its U.S. businesses would operate independently. The announcement was the first time it had described plans for the newly acquired U.S. operations as a sale and indicated that it would retain no stake.

Dubai Ports World has said those U.S. operations are worth about $700 million.

Seymour, the president of Dubai Ports World's U.S. subsidiary, said there was "already significant interest in the sale from American buyers.”


I doubt very much if any American buyer is willing to spend $700 million dollars to purchase the U.S. operations. The high likelihood is that Dubai World Ports will spend the next six months trying to improve its image. At the end of that time, it will successfully obtain the approval of both houses of Congress. There is no substantial reason to oppose this deal. The vast majority of Americans are not bigots. They reject Arab bashing extremists like Pat Buchanan and the Daily Kos.

24 comments:

I ROCK!!!!! said...

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Seneca the Younger said...

Thanks for stopping by, son, but what you're doing is a lot like comment spam. Add a little bit of commenting that says you read the blog, something about the topic. If you keep doing these "check out my blog" comments, people will start just deleting them.

Keep blogging, though.

Seneca the Younger said...

So, anyway, David, I saw something in the last couple of days about a US firm that is politically connected, and is offering $200 million for the port servicing rights. I don't have time (new job) to dig it up right now, but you might find it an interesting thread to tug.

David Thomson said...

"offering $200 million"

Just 200 million? Let's see: 700-200=500. What about the remaining sum of money? I don't think those numbers add up. No, Dubai Ports world will likely not find an American buyer.

Pastorius said...

David,
I think it is inaccurate to call people who oppose this deal bigots.

The UAE is not Saudi Arabia or Iran, but they are hardly an enlightened country.

I am a person who supported the deal until the day after our Congress voted it down, which was followed by the UAE announcing that our legislators opinion didn't matter to them. The deal was still on.

Do you remember that?

The UAE has clearly shown that this deal means more to them than $6 billion. This deal is part of a larger strategy. If it were not, then the UAE would not behave the way they do, and they would not have paid more than market value.

I don't know what the larger strategy of the UAE is. But, I think we ought to find out.

David Thomson said...

"The UAE is not Saudi Arabia or Iran, but they are hardly an enlightened country."

I never said that only bigots were against this agreement. Some people are merely confused. That is why Dubai deserves more time to present its case.

Dubai is held to a much higher standard than our other allies. The German government apparently provided welfare benefits to the Hamburg terrorists. France, Russia, and sadly even Great Britian have often been soft on terrorism.

David Thomson said...

I do not live in a dream world regarding Dubai. You might wish to take a look at this earlier post:

YARGB - Flares into Darkness: The United Arab Emirates Leave Much to be Desired, But....

Knucklehead said...

Pastorius,

I am a person who supported the deal until the day after our Congress voted it down, which was followed by the UAE announcing that our legislators opinion didn't matter to them. The deal was still on.

I don't understand why this turned you against the deal. This is a UAE company purchasing a British company. Part of the "deal", some 10-12%, involves lease rights to some US terminal facilities. Something north of the mid-80% of the "deal" involves facilities and operations outside the US.

"We're going ahead with this business deal between DPW and O&P. Since the US people and the US Congress does not want a UAE company to control any terminal facilities and operations within the US we will seek a buyer acceptable to the US government for that portion which involves assets and operations within the US" seems a perfectly sensible and acceptable reaction on the part of UAE to me.

Do you believe that DPW should have (or even could have) backed out of this enourmous global business deal entirely based upon pissing and moaning from the US Congress? If some big, global hotel company was buying out another big, global, hotel company and the US Congress got all huffy and said, "We don't want you swarthies owning hotels in the US" and they buyer said, "Well, OK, we'll sell the US hotels part of this thing to somebody else but we're moving forward and buying the rest of global operation" would you be pissed at them for it?

What am I missing?

terrye said...

I agree, Congress should not have done this and to be honest I do not see how they could legally interfere in the deal. There were plenty of oppurtunities to stop this long before it got to this point.

Other than insulting an ally, driving down Bush's poll numbers while we are in a war and letting the Democrats grandstand I fail to see what this sorry episode of xenophobia accomplished.

Honestly, there are times when conservatives are their own worse enemies.

Pastorius said...

Knucklehead,
UAE's reaction that you quoted was not their initial reaction. Their initial reaction was to say they weren't out of the U.S. no matter what Congress had to say about it. Additionally, they threatened an economic boycott:

http://ibloga.blogspot.com/2006/03/disproportionate-response-reveals-real.html

They are willing to go to the mattresses over $6 billion.

That is a disproportionate response which is indicative of the deal being worth more than it ought to be.

That has nothing to do with them being "swarthies."

terrye said...

pastorius:

I would say that the treatment they got from the Congress was disproportionate. In fact I don't see how it could be legal. These folks did not break any laws, they did not do anything wrong.

You know if we have a dust up with Iran the UAE will most likely be ground zero. That same Congress sold them more military hardware than almost any other country on the earth without any qualms at all. The same Congress has no problem with Dubai port doing port calls for the fifth fleet. This was a cheap political trick that damaged our relations with a country that we need every bit as much as they need us.

And you know what? The Saudis and the Chinese are still here.

Pastorius said...

Terrye,
What you say may be true. However, Congress does have the right to say yay or nay to these sorts of deals. Remember a few mmonths back when China was going to buy Shell? Remember what happened?

I am not saying that I am correct. I am just saying that this needs to be looked into. We don't know why UAE is willing to go to the mattresses.

It could be simply Arab ego, or it could be that it's part of a grand business strategy to which we would have no objections.

Or, it could be that they owe Saudi Arabia and Iran some favors which they were intending to repay.

Understand?

You do not know the answer to this. It could be anyone of the three. We need to find out before we proceed.

terrye said...

pastorius:

No I do not understand. This was a straight forward business deal.

80% of our terminals are under the control of foreigners without so much as a kiss my behind from Congress. This deal was done last November, they went through the process, they volunteered to go through more of a process.

Congress just stepped into a business deal because right wing idiots like Savage and Malkin had done their antiMuslim rant.

Right now these people are more important to us in the WoT than almost any other country. We are being theatened by people we can not find without the assistance of people like this. They have done everything we ask of them but because they are Arab and Congress is a bunch of cowards we just smacked them upside the head.

That will teach them to cooperate with us.

Knucklehead said...

Pastorius,

If I were in their shoes I'd be pissed off and mighta have flipped the United States Congress the verbal bird too.

They went through the standard process for this sort of thing and it was approved. When that wasn't good enough they agreed to go through some other process. They have a $6+B business deal in the works here and Congress tells them they don't give a rat's arse what hoops they are willing to jump through, it ain't enough.

Is it legitimate to expect them to have just said, Oh well, no prob bob, we'll just wait it all out and take bottom dollar for assets you guys just made it impossible for us to sell at fair value.

I'm with Terrye. I think a whole lot of people behaved very badly. If some people in the UAE got ticked off and said harsh words I find it difficult to fault them for that.

Pastorius said...

Terrye,

You said: This was a straight forward business deal.



Are you a biz person? I am.

When my client signals to me that the deal is worth more than it clearly is, I attempt to figure out why before the deal goes through.

all kinds of crap can happen when something is more important to a person than it should be. that is only common sense.

Pastorius said...

Knucklehead and Terrye,
I'm serious in asking; have either of you ever been involved in negotiations for sales in a vcompetitive business situation?

That's what I do for a living. As the guy who is responsible to not only bring in the biz now, but to make sure that we maintain or increase market share, I can not afford to let a deal go through if I don't understand why the client thinks it's more important than it is according to normal market standards.

Go ahead, argue with me, and tell me your experience in such dealings.

Pastorius said...

By the way, honestly, I am frustrated with you guys, because you are intelligent, but on this subject, all of the sudden it's bigot this, and "swarthy" that, and Malkin is a big fat idiot.

You guys sound like the Daily Kos people.

Knucklehead said...

Pastorius,

I'm serious in asking; have either of you ever been involved in negotiations for sales in a vcompetitive business situation?

Yes, I have. I've been involved with business deals, large ones, where I was on the losing end despite having the best product and expertise but inferior political (in the business sense) connections. I've been involved in similar deals where I was on the side with the superior product, price, expertise and even business-political connections and watched as an intransigent and small-minded rank and file stonewalled and backstabbed what should have been no-brainer success into something that looked an awful lot like dismal failure.

And I've been on the other side where connections and the go along to get along, we don't know these guys but we'd rather not spend the effort to learn what they're all about, sense of devil you know vs. the devil you don't got the business despite having inferior product, price and expertise.

The notion that business is always about what makes clear cut sense is, well, nonsense. Business is not different than any other human endeavor.

What was your point?

DPW, as far as I can figure it, is a world class container terminal operator. They are fully qualified to operate container freight terminals in the US and everywhere else on this planet. As far as I can figure it they are more qualified than any US owned firm.

They are qualified to do the job.

Prior to this particlar "deal", did the US have any said foreign owned firms could not be allowed to operate freight terminals in the US? No. Clearly we didn't. The PRC, Singapore, and other foreign owned firms operate the vast majority of the freight terminals in US ports.

They are qualified to do the job and we have no national policy that forbids them from doing it.

So what, pray tell, is your rationale for denying them the job?

As far as I can see from your previous comments in this thread your rationale is that they, after being treated as if they were unqualified criminals, they reacted badly and made some statements and threats they shouldn't have made upon which they have not yet taken any action. They said some shit they shouldn't have said.

Every April 15th I say some some shit I shouldn't say and it is directly aimed and the United States Congress. And I threaten economic boycott. So what? For way too much of the time the US Congress behaves like a bunch of asshats. After I vent I get back to to living my life and doing my business and what little I can to move the whole thing in the right direction or at least prevent it from going in the wrong direction.

And, BTW, get a grip. This site bears no resemblence whatsoever to DU or Kos. Gee, you vented and said something unreasonably harsh. Funny how that stuff works, ain't it.

Pastorius said...

Knikclehead,

Ok, you make a good point. I respect your experience and your opinion. I don't agree with it, however.

The idea of calling Malkin stupid is not justifiable. You're not going to get far with that one, except in the land of the demagogue.

So, actually, I don't think my "vent" was nearly as bad as the ones I have observed here., though, I admit, I was pissed.

The idea that those who oppose this deal must be bigots seems rather shallow to me.

Pastorius said...

By the way, sorry for the horrible typint. I recently broke my hand. Makes it very hard to be clear on web sites.

Knucklehead said...

Pastorius,

I don't recall ever calling Malkin stupid. That may be the first time I've ever typed out her name. Probably not but I'm not a huge Malkin fan. She does some reasonably good stuff but gets a bit over the top sometimes. She's not a run amock screedist but she can screed when she sets her mind to it. I haven't read her much at all that I recall re: the DPW thing.

The cases I've seen laid out against the DPW "deal" have been ill-informed (perhaps deliberately so) weak and often, at least in part, based upon fear, innuendo, guilt by association, Muslim fatigue, and some of what sure walks and quacks like the Bigotry Duck. A whole bunch of what's been splatted out is instantly dismissable as irrelevant gibberish.

I started out knowing next to nothing about "ports" and it took a very small amount of effort to get the basics of understanding that "ports" are a collection of various types of facilities, that different companies run different facilities, that there are partnerships, that ports are "owned" by the local authorities, that terminal facilities within ports are leased and improved upon as business operations by various companies, most of which are not US owned, and so on and so on and so on.

My original inclination was to be against the DPW deal. But as I gathered up basic information it became clear that the MSM was bound and determined to obscure what the heck the whole thing was all about. I could not find any good reason to line up against this business deal among international companies for the lease assets of some freight facilities in US ports.

To be honest I've stopped reading stuff about it. I can't get past the ubiquitous inaccuracy of "owning ports". If the writer can't take the trouble to either learn or briefly note the difference between "owning ports" and having the operating lease on some terminal facilities then I can't take the trouble to read what he wrote.

I've yet to see - and maybe it is made by Malkin - a coherent case laid out for why DPW should not be allowed to manage container terminals in US ports.

They're well qualified for the job. They do the work all over the globe. They handle port and provisioning operations for the US Navy in the UAE and the US Navy seems happy with their work. The deal was looked at by the people we task with looking at such deals. They initially had concerns or objections and, apparently, all those concerns and objections were addressed and they stamped it OK. That's good enough for me. I would have been happy with an additional 45 days to double check all the effort and address any new concerns.

At this point, and I suppose I should apologize in advance for saying it, but the US Congress on this sounds to me like the WHITE, GODFEARING CITIZENS OF ROCK RIDGE from Blazing Saddles, "We'll take the racial slurs and the racial slurs but we don't want the racial slurs!"

Pastorius said...

It was Terrye who called Malkin an idiot.

Knucklehead, I agree with everything you say about why UAE should have the deal, AND I think we need to look at why they paid more than market value for the deal, and why their initial reaction to the US Congress vote was to be belligerant and threaten a trade war with the US.

one $6 billion deal should not precipitate such threats. That reaction is out of proportion to reality, in my opinion.

Knucklehead said...

Pastorius,

If Terrye called Malkin an idiot I'm guessing Malkin deserved it ;)

I cannot find the link you gave above (it stretches beyond what I can cut and paste and I can't locate anything that looks like it at that blog) so I cannot comment on DPW paying more than "market value" for O&P.

One thing that should be mentioned, I think, is that $6B isn't pocket change even in today's world of large corporate buyouts. That's real money. The UAE is a $100B economy. Every single one of their 2.5M nationals may have a ginormous palace for all I know but oil rich as they may be they aren't an economic powerhouse by any stretch of the imagination.

Buyouts generally mean some premium over "market value" if what's being bought is commercially sound. IIRC there were at least two bidders for O&P, so presuming they actually wanted to win the bid they clearly would have put together an offer somewhere north of what they expected the competition to offer.

But all that said, why is it the least bit important what they paid for O&P when it comes to whether the US should allow them to operate terminal facilities in the US? Assuming that they paid "too much", how is that important to the issue?

I know absolutely nothing about any blustering done by anyone in the UAE or DPW following the action by the House Appropriations Committee but, as I've already said, I don't find it the least bit suprising that somebody among them would have blustered and said unkind things after that treatment.

The 45 days additional "investigative period" would have gone a long way to letting everyone calm the heck down and actually learn something instead of running around like, well, idiots. If the questions you ask are important we may have gotten answers to them.

Pastorius said...

Yes , another 45 days to look into the deal probably would have been a good idea.

I think it is more than likely the case that the Dems concern in the port deal had to do with Unions, not security. Or, it could be that they were smart enough to realize they could demagogue this issue into a way to drive a wedge between Bush and the Republican Congress.

I have a hard time believing that strategy could have been worked out and executed though.

Anyway, it is also likely that there is absolutely nothing wrong with the UAE port deal. But, it didn't look right to me, for the reasons I have enumerated above.

As far as Malkin being an idiot? Well, she might believe in things you guys don't believe in, but she is scary smart. Really one of the smartest pundits out there.