A High Court judge gave the go-ahead yesterday for Dubai Port World's £3.8bn takeover of P&O after dismissing objections to the deal on security grounds by one of the British company's US partners.
The court approval for the deal came as it emerged that the US government is investigating a second takeover deal involving a Dubai-owned company and a UK group. The Committee on Foreign Investments in the US is examining Dubai International Capital's $1.2bn (£700m) takeover of the privately owned British engineering company Doncasters, which operates plants in America producing parts for military aircraft and tanks.
The move is highly unusual - only 25 of the 1,600 cases reviewed by the committee have been subject to such investigation - and underlines the concerns felt in the US about takeovers involving Gulf states.
Dubai International said it was confident the US would approve the offer, while Doncasters said it was pursuing all regulatory approvals "as is customary for international business transactions of this nature".
In the High Court, Justice Nicholas Warren ruled that the submissions of P&O's US partner Eller & Co and two private shareholders in P&O who also opposed the DP World deal were not sufficient to prevent the takeover from proceeding. The judge sanctioned the scheme of arrangement which enables the state-owned Emirates group to acquire P&O.
The judge also refused Eller leave to appeal. But Eller's legal representatives indicated they intended to seek permission to appeal from the Court of Appeal and the court agreed to delay sanctioning the takeover until 3pm this afternoon.
The deal has run into huge opposition in America, where it is feared that DP World's takeover of five US ports run by P&O could compromise national security.
Eller, which provides stevedoring services to cruise ships docking at Miami, had argued that US concerns about the DP World takeover could substantially harm its business. Paul Downes, Eller's lawyer, told the court: "The concern was that the United Arab Emirates was a player, was involved, was associated with terrorist funding. It doesn't matter whether this is right or wrong, that is the mindset of the individuals that are concerned about this takeover."
Despite this, President Bush has personally backed the deal and yesterday it emerged that his predecessor, Bill Clinton, had also advised Dubai on how to ease the takeover through.Reuse content