DP World is one of the world's largest port operators and plans to acquire Imperial Logistics in South Africa for US$890 million to strengthen its footprint on the second largest continent in the world. Imperial Logistics, a logistics company listed in Johannesburg, is an integrated logistics and market access company with operations in Africa and Europe.

Sultan Bin Sulayem, Chairman and CEO of DP World Group, said in a statement: "The acquisition of Imperial will help DP World build a better and more efficient supply chain for shippers, especially in Africa." "Imperial's business is right. Supplement to our network of ports, terminals and logistics operations on the African continent."

The transaction is funded by DP World's existing available resources and is expected to be completed in the first quarter of 2022. After DP World announced the offer, the share price of Imperial Logistics soared nearly 34%. DP World’s cash offer of 66 South African rand (ZAD) per share means that the equity consideration is approximately 12.7 billion South African rand (890 million US dollars), which is a 39.5% premium to the imperial share price on the Johannesburg Stock Exchange as of July 7. , A 34.2% premium to the 30-day volume-weighted average price.

However, the transaction is subject to Imperial College’s shareholder approval and other customary completion conditions, including regulatory approval. Imperial focuses on fast-growing industries, including healthcare, consumer, automotive, chemical, industrial and commodities, with operations in 25 countries/regions, including an important footprint in the high-growth African market. The port operator said its acquisition of Empire will add new capabilities to DP World, especially in Africa, as it aims to improve links between African producers and the rest of the world along the fast-growing trade routes.

This move builds on DP World’s significant expansion in the African continent in recent years, investing in seaports, terminals and logistics services to seek lucrative trade routes into the region. According to the company's website, its existing investments in Africa include projects in Egypt, Algeria, Djibouti, Rwanda, Somaliland, Mozambique and Senegal. Earlier, DP World acquired the American logistics company Syncreon for a total enterprise value of US$1.2 billion. Syncreon is a global logistics provider headquartered in the United States, specializing in the design and operation of complex supply chains for the high-growth automotive and technology industries.

Last month, DP World stated that it opened a new container terminal in Somaliland’s Berbera port and is working to further expand the terminal’s capacity and develop it into a major regional trade hub serving the Horn of Africa. The newly opened container terminal will increase the port’s container capacity from the current 150,000 20-foot standard unit (TEU) per year to 500,000 TEU. In May 2021, the Dubai-based port operator stated that after revising the initial contract between the company and the government, it will start developing a greenfield deep-water port in the Democratic Republic of Congo. In March 2018, DP World obtained a 30-year concession to develop and manage a $1 billion banana port on the Atlantic coast of the Democratic Republic of Congo in a joint venture with the government.

The port operator also launched an e-commerce platform, Dubuy.com, which increased trade with Africa in April, facilitating companies from the UAE and the world to reach the mainland. In 2020, the port operator signed an agreement with Senegal to develop its Ndaan deep-water port, becoming the company's largest port investment in Africa at that time. DP World Dakar stated that it will invest a total of US$1.1 billion in the two phases of the project, aiming to enhance Dakar's status as a major logistics hub and a gateway to West Africa and northwestern West Africa.

DP World recorded a 10.2% increase in container traffic in the first quarter and is expected to provide improved performance in 2021 from the global economic recovery from the Covid-19 pandemic. The port operator handled 18.9 million TEUs in the first three months of 2021, up from 17.2 million TEUs in the same period in 2020. All regions recorded growth, with freight volumes in the Americas and Australia increasing by 17.7% to 2.7 million containers.

Keywords: Foreign Engineering News

According to data from the International Monetary Fund, global trade will improve after a rebound in the second half of 2021 due to suppressed demand for automobiles and other consumer durables in advanced economies and the recovery of supply chains in emerging markets. According to the fund’s estimates, after shrinking by 8.5% in 2020, trade is expected to grow by 8.4% and 6.5% in 2021 and 2022, respectively. Editor/XuNing