DUBAI, United Arab Emirates (AP) — Port operator DP World said on Thursday it has reached a deal to buy the Dubai government-linked operator of free-trade zones in the Middle Eastern commercial hub for $2.6 billion.
The Dubai-based port operator, one of the industry's biggest, said the deal to acquire Economic Zones World would help streamline operations at Dubai's vast Jebel Ali port and free zone complex and boost its earnings by 15 percent.
The two companies are already closely linked. They are both majority owned by the government through its Dubai World conglomerate, which was at the center of the financial crisis that rattled markets worldwide when it came to a head in the emirate in 2009.
Dubai's economy, which is heavily dependent on trade, tourism and financial services, has come roaring back as the global economy has improved.
But the emirate and its web of government-backed companies still face a daunting debt load. The International Monetary Fund estimated in July that they together must repay or refinance $92 billion through 2019 alone.
EZW's main business is running the 57 square kilometer (22 square mile) commercial and logistics park next to Jebel Ali, the Mideast's busiest port, which DP World operates. It generated $221 million in pre-tax profits last year, according to the port company.
DP World's acquisition of EZW includes the assumption of $859 million in debt.
DP World separately said it aims to pull its shares from trading on the London Stock Exchange after listing them there in 2011. It will keep its listing on the Nasdaq Dubai, where most trading of its shares happens.
Shareholders must still approve both the EZW purchase and the stock delisting.
DP World operates more than 65 sea cargo terminals on six continents, with a heavy emphasis on fast-growing markets in the developing world.
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