DP World to acquire Economic Zones World in $2.6bn deal

DP World, one of the largest port operators in the world, is in a bid to further strengthen its regional standing. The company and its wholly owned subsidiary DP World FZE have entered into an agreement to acquire Economic Zones World FZE (EZW) from Port and Free Zone World FZE (PFZW) for a total cash of USD 2.6 billion.

DP World's acquisition of EZW includes the assumption of net debt of USD 859 million.

EZW has five business units including Jebel Ali Free Zone, the 57 square kilometer modern commercial and industrial logistics park adjacent to DP World’s flagship Jebel Ali port. It is EZW's primary business unit representing 97 percent of revenue and operating profit for the year ended December 31, 2013.

The proposed purchase is expected to increase the company's earnings by 15 percent and generate a return of more than 7 percent on capital employed in its first full financial year, said DP in a media statement released recently.

The port operator intends to fund the consideration for the proposed acquisition from existing cash resources, conventional and murabaha term loan and revolving facilities.

The existing USD 650 million bond issued by JAFZ Sukuk due in 2019 and JAFZ’s Syndicated Islamic Facility, will remain in place following completion, with DP World retaining flexibility to explore financing options, it added in the statement.


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