CDPQ announced US$5 billion investment in 3 of DP World’s flagship UAE assets

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Dubai’s state-owned logistics giant DP World is selling stakes in the city’s port and two other prized assets to Caisse de dépôt et placement du Québec (CDPQ) as the pension fund manager expands its reach further outside Canada.

Montreal-based company will invest US$5-billion in Dubai’s port, the Middle East’s largest, as well as two industrial zones, the pension fund said in a joint statement on Monday with DP World.

Other investors will also be invited to buy in, up to a maximum of US$3-billion, with all transactions expected to c lose by the end of the year.

CDPQ will invest $2.5 billion in Jebel Ali, which is the Middle East’s largest transhipment port, and the business parks, DP World said. CDPQ will finance the rest through debt.
The transaction implies a total enterprise value of $23 billion for the three assets, which also include Jebel Ali Free Zone and National Industries Park.
DP World Chairman and Chief Executive Sultan Ahmed bin Sulayem said the deal with CDPQ would achieve DP World’s target of reducing net leverage to below 4x net debt to earnings before interest, taxes, depreciation, and amortization.

 

The agreement highlights a willingness by governments in the Persian Gulf to offer international investors the opportunity to buy state assets as a way to bolster their finances. For the Caisse, it underscores its unrelenting push overseas. About three quarters of the pension fund’s assets are now invested outside Canada, up from 41 per cent a decade ago.

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