....it usually gives to foreign purchases of U.S. businesses.
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You realize that this is not a true statement. The purchase is by a non-U.S. business from a non-U.S. business.
As Rush is saying now there are some really good reasons for this deal to go through, but it will not happen because a tsunami of political posturing has started and cannot be stopped.
If the world were perfect, a US company would operate all the ports and win all the contracts, and if I were a genie, I would make it so.
I continue to try to research why this is not true today. Do you know why the P&O has been operating these container ports? Perhaps it is because they funded the construction of them. Perhaps they own the cranes. Perhaps, American companies could not deal with the ILO as well as a British company could.
I just speculate in the absence of info.
"Do you know why the P&O has been operating these container ports?"
Because they are to container port operations what Halliburton is to oilfield services--the best there is, and everyone else just does not have the technical ability to perform at that level.
Well of course it is. But it also involves significant domestically-based infrastructure, so it is subject to the same review process. You knew that, right?
Do you know why the P&O has been operating these container ports? Perhaps it is because they funded the construction of them.
P&O's principal acquisition binge of US terminal infrastructure was in the late 1990's.
A little background might help:
P&O Ports is the P&O Group company responsible for port development, investment, operating and stevedoring activities. It operates approximately 31 container, general cargo, and passenger terminals in New York, New Jersey, Philadelphia, Baltimore, Miami, New Orleans, and Vancouver, and owns half of Norfolk's CP&O Ports Virginia, the largest stevedoring service in Hampton Roads.
A little history of a part of P&O's US operations gives you a flavor of what is being transfered to DP World:
International Terminal Operating Company, Inc. (ITO) was founded in 1921 by Captain Franz Jarka. Originally called The Jarka Corporation, the company specialized in handling freight and passengers in the Port of New York. Soon, The Jarka Corporation expanded its services to encompass the ports of Boston, Philadelphia, Baltimore, and Hampton Roads, Virginia. In 1962, ITO was acquired by Ogden Corporation. In 1983, the company merged with John W. McGrath Corporation, which included Atlantic and Gulf Stevedores, Inc. and integrated their North Atlantic and Gulf Coast operations. Ogden and McGrath continued to share ownership of ITO.ITO opened its first public container handling facility in 1967, and it was among the first to utilize computers in its terminal operations. The company used the latest technology to coordinate all its port activities, including receiving and delivery functions, cargo documentation, and terminal security. ITO worked with many of the largest container, break-bulk, and specialized cargo carriers in the world and became one of the largest stevedores and marine terminal operators in the United States.
In 1999 the United Kingdom-based Peninsular and Oriental Steam Navigation Co. (P&O) acquired ITO. The company then became part of P&O Ports, one of P&O's many subsidiaries. P&O Port's operations spanned 17 countries around the globe. In all, P&O Ports ran 24 container terminals in 84 ports.
And now, of course, for the sum of $6.8 billion, DP World is the proud owner of the former P&O Ports, complete with its former ITO operations and acquired operations in New Jersey, Miami, New Orleans, and Vancouver.
And as noted in Forbes (during the bidding war for acquisition of P&O):
DP World made the first formal approach for P&O in November, when it offered 3.3 billion pounds ($5.9 billion) for the 165-year-old company.A deal would make the combined company the third-largest ports operator in terms of capacity, lifting DP World up from its current rank as No. 7.
Once again, the concerns are: (1) Dubai state ownership of DP World; (2) that Dubai has a rather ignoble and disturbingly direct history of ties to terrorist funding and transit; (3) that DP World's ownership rights over existing North American terminal infrastructure and operations comes complete with extant leasehold, stevedoring, wharfage, and seaway rights; and (4) that the CFIUS did not conduct a 45-day investigation on top of the initial 30-day review that it usually gives to foreign purchases of U.S. businesses.
Rush's comments notwithstanding, this transaction stinks for purposes of US homeland security, and it stinks even more that it was given so little scrutiny.