AD Ports buys majority stake in Dubai-based global container shipping company for $800m

The deal will boost the company's global feeder shipping footprint and expand its operations

Khalifa Port in Abu Dhabi. The AD Ports Group is expanding its operations internationally. Reuters

AD Ports Group, the operator of industrial cities and free zones in the emirate, has bought an 80 per cent stake in a Dubai-based global container shipping company as it continues to focus on boosting its portfolio and expanding its fleet.

The Abu Dhabi company acquired Global Feeder Shipping for Dh2.9 billion ($800 million), implying a 100 per cent enterprise value of Dh3.7bn.

The deal will be funded through an acquisition loan, AD Ports Group said in a filing on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.

The “value-accretive strategic investment significantly broadens AD Ports Group’s global feeder shipping footprint and contributes to its long-term strategy to become one of the world’s premier short-sea and feeder shipping players”, the company said.

GFS has one of the largest fleets of container ships globally, operating 26 owned and operated vessels with a total capacity of 72,500 twenty-foot equivalent units (TEUs) across the Middle East, the Indian subcontinent and South-East Asia.

The company's revenue in the last twelve months stood at $1.08bn while net profit was $481m.

AD Ports Group plans to integrate GFS into its maritime cluster, which already offers a comprehensive portfolio of shipping, offshore and subsea services.

“Aligning GFS services with Safeen Feeders and Transmar will make AD Ports Group the largest single provider of feeder shipping services in the region, with a fleet of 35 vessels and [the] third largest globally by volumes carried, with a total container capacity of 100,000 TEUs,” it said.

AD Ports Group established Safeen Feeders in 2020 to improve trade connectivity between the region’s ports.

“Our acquisition of a majority stake in GFS, which is the largest external investment in our company’s history, will deliver a step-change in the range of services we can offer and significantly enhance our global connectivity,” said AD Ports Group chairman Falah Al Ahbabi.

“Our ambition is to become one of the world’s leading shipping companies, offering the most comprehensive range of maritime services, and this investment moves us significantly closer to achieving that goal.”

The transaction is expected to close in the first quarter of 2023, subject to regulatory approvals. GFS’s existing management will remain in place, with the founders retaining a 20 per cent stake in the company, according to the regulatory filing.

Citi acted as the financial adviser and A&O as the legal adviser while Roland Berger completed the commercial due diligence on the transaction.

Established in 2006, AD Ports Group owns and operates 10 ports in the UAE, including Khalifa Port, Zayed Port, Mussaffah Port, Fujairah Terminals, Community Ports, Kamsar Port and the Abu Dhabi Cruise Terminal, as well as a terminal in Guinea.

It also manages more than 550 square kilometres of industrial zones and an end-to-end logistics business, besides offering a range of maritime services.

The company continued to expand its operations and signed a number of new deals in recent times.

In August, it signed a preliminary agreement with India's Adani Ports to explore joint investment opportunities in Tanzania.

It is also collaborating with Hong Kong-based Hutchison Ports to identify business opportunities in feedering, logistics and port activities across the GCC, Africa and Asia in the maritime and logistics sector.

It also plans to expand its presence in Egypt and is developing and operating a multipurpose terminal at Safaga Port, in partnership with the Egyptian Group for Multipurpose Terminals, on the Red Sea.