AD Ports Group has signed an agreement to acquire an 80 per cent equity stake in Dubai-based Global Feeder Shipping (GFS).
The total purchase consideration amounts to AED2.9 billion ($800 million), implying a 100 per cent Enterprise Value of AED3.7 billion ($1 billion), with the acquisition being fully funded through a new acquisition loan.
This acquisition follows AD Ports’ efforts to expand its feeder global shipping footprint.
GFS owns of the largest fleets of container ships globally – featuring 26 owned and operated vessels with a total capacity of 72,500 TEU, covering the Middle East, Indian Subcontinent and Southeast Asia with services connecting several countries across Asia.
AD Ports Group will look to integrate GFS into its Maritime Cluster.
Aligning GFS services with the group’s companies, SAFEEN Feeders and Transmar, will in turn make AD Ports the world’s largest independent feeder company by vessels owned – with an owned fleet of 35 vessels –, and the third largest globally by volumes carried – with a total container capacity of 100,000 TEU.
AD Ports said the acquisition will boost its trade activities and connectivity to core markets, as well as enhancing its feedering business, providing significant economies of scale through an expanded route network and fleet.
The transaction remains subject to regulatory approvals, and it is expected to close in Q1 2023.
GFS’s existing management will remain in place with the founders retaining a 20 per cent stake in the company.
“At the direction of our nation’s wise leadership, AD Ports Group has been on a journey of development throughout 2022, driven by both organic growth and prudent investments,” said Falah Mohammed Al Ahbabi, Chairman of AD Ports Group.
“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.
“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.”
Under the partnership, the signatories will create a platform to implement remote and autonomous technology, and to create guidelines that will ensure the UAE is prepared to welcome the use of latest industry advancements.