Saudi Arabia's Hassana Investment to buy $2.4bn minority stake in DP World's UAE assets

The three assets are Jebel Ali Port, Jebel Ali Free Zone and National Industries Park

Saudi Arabia's Hassana investment implies a total enterprise value of $23 billion for DP World's UAE assets. Photo: Reuters
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Saudi Arabia's pension investment fund has bought a minority stake in DP World's flagship UAE port, free zone and business park for $2.4 billion, further bolstering the Dubai company's balance sheet.

Hassana Investment Company (Hassana) ― the investment manager for the General Organisation for Social Insurance ― will hold a stake of about 10.2 per cent in Jebel Ali Free Zone and National Industries Park through a new joint venture with DP World, the ports operator said in a statement on Wednesday.

The investment by Hassana, which manages one of the largest global pension funds, implies a total enterprise value of approximately $23 billion for the three assets, DP World said.

"This new partnership will serve to enhance our assets and allow us to capture the significant growth potential of the wider market," said Sultan bin Sulayem, group chairman and chief executive of DP World.

"The transaction further strengthens our balance sheet, which, combined with the continued resilience of our business, diversity in our portfolio and focus on supply chain solutions, will support our target of achieving a strong investment-grade rating for the DP World group."

The transaction follows an investment in June by Canadian fund Caisse de Depot et Placement du Quebec (CDPQ) of $5 billion in the same three DP World UAE assets ― Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park.

The Montreal-based pension fund said it will take a 22 per cent stake in the three Dubai-based assets through a new joint venture with DP World.

Other long-term investors will have the opportunity to acquire an additional stake worth up to $3 billion in the joint venture, DP World said at the time.

DP World's three assets — including the Middle East’s biggest port and two industrial zones that have helped to transform Dubai into a global trade hub — generated pro-forma revenue of $1.9 billion in 2021.

After Hassana's investment, which closed on December 19, the three assets remain fully consolidated businesses within the DP World group. Their day-to-day operations, customers, service providers and employees will not be affected, DP World said.

"This partnership highlights our focus and strategy to invest in critical infrastructure assets in the region that we believe will deliver long-term sustainable returns," said Saad bin Abdulmohsen Al-Fadly, chief executive of Hassana Investment.

"Favourable demographics and macroeconomic drivers and investment in transformational projects will continue to support growth momentum regionally, while trade between the emerging economies of Asia and Africa is also expected to thrive," he said.

Global trade is expected to hit a record $32 trillion in 2022, increasing 12 per cent amid resilient demand for goods and services, according to the UN Conference on Trade and Development (Unctad).

Trade in goods is expected to total almost $25 trillion, an increase of about 10 per cent from last year, Unctad said in its Global Trade Update report. Trade in services is expected to reach almost $7 trillion, up by about 15 per cent from last year.

Updated: December 21, 2022, 10:42 AM