Dubai's DP World and Caisse de Depot et Placement du Quebec (CDPQ), a global investment group, announced today an investment of $5 billion in three of DP World’s flagship UAE assets.
Based on the deal that was announced in a statement, CDPQ will take a 22% stake in DP World’s Jebel Ali Port, Jebel Ali Free Zone and the National Industries Park where it will invest $2.5 billion, with the remainder of the transaction being financed by debt.
Other long-term investors will have the chance to acquire an additional stake of up to $3 billion, according to the statement. The transaction implies a total enterprise value of approximately $23 billion for the three assets.
The Jebel Ali Port, Free Zone and National Industries Park together comprise a best-in-class group of infrastructure with a solid long-term track record of growth. Combined, the Jebel Ali Port, Free Zone and National Industries Park, form a world-class integrated ecosystem for the supply and logistics chains of over 8,700 companies from around the world, serving more than 3.5 billion people globally.
The statement clarified that the three assets will remain fully consolidated businesses within the DP World Group, and day-to-day operations, customers, service providers and employees will not be affected.
Addressing the deal, Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: "We are delighted to announce the broadening of our partnership with CDPQ. The DP World and CDPQ co-investments have been very successful, thanks to our complementary expertise and long-term investment horizon. We believe this new partnership will enhance our assets and allow us to capture the significant growth potential of the wider region. The transaction also achieves our objective of reducing DP World’s net leverage to below 4x Net Debt to EBITDA and this has been achieved despite the challenges of the pandemic and recent global economic conditions. The significant strengthening of our balance sheet, the continued resilience of our business, diversity in our portfolio and continued focus on supply chain solutions will support our target of achieving a strong investment-grade rating for the Group. Overall, we believe this transaction provides a strong platform for the UAE assets to meet their long-term growth objectives, while the stronger balance sheet supports the Group’s wider end-to-end supply chain solution strategy, which will drive sustainable value for all DP World stakeholders."
While Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, commented on the fruitful collaboration by saying: "This investment in Jebel Ali is another great illustration of the partnership between CDPQ and DP World, which now spans four continents and eighteen terminals. Today, we are pleased to deepen our long-standing relationship with a world-class logistics and supply chain operator by investing in this strategic trade infrastructure, one that will play a pivotal role in the evolution of the global economy. DP World is well positioned to provide innovative solutions to their customers worldwide, and we welcome this opportunity to invest in a best-in-class group of infrastructure that provides CDPQ with exposure to new fast-growing markets and trade routes in Africa and South Asia."
Tranche 1 ($5 billion) of the transaction is expected to close in Q2 or Q3 of this year, while tranche 2 (up to $3 billion) is expected to close during this year's Q4, according to the statement.
