Dubai Ports World (DP World) made the announcement after leading
Republicans told President George W Bush that the takeover would be blocked by Congress.
“Because of the strong relations between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the US operations of P and O Ports North America to a United States entity,” said a company statement.
“This decision is based on an understanding that DP World will have time to effect the transfer in an orderly fasion and that DP World will not suffer economic loss,” the statement said.
The company said it was looking forward to working with the US Treasury “to implement that decision.”
Details not disclosed
Details of the transfer were not immediately disclosed but while US politicians were relieved, business groups immediately warned of a potential backlash against US economic interests.
The company statement came as the Senate began debating legislation to blocking the deal, which would have given DP World operational control of ports in Baltimore, New York, Miami, New Jersey, New Orleans and Philadelphia.
DP World said that the UAE prime minister, Sheikh Mohammed bin Rashid al-Maktoum, had advised the company that the assets disposal was “the appropriate course to take” in the interest of the UAE and the US.
An UAE official said the transfer of US port operations to a US entity was the result of a “political decision” by the United Arab Emirates government to help its “friends” in the United States.
“This is a political decision to ask DP World to defuse the situation,” said the official.
“We have to help our friends. Our close ties with the United States are important,” the official said.
The announcement was made as DP World earlier said it had completed the US$6.9 billion (A$9.4 billion) takeover of British firm P&O.
The US Senate was clearly going to back fierce and widespread Republican opposition to the deal, which President Bush has strongly defended. Republicans and Democrats had joined forces to block the plan, citing security concerns.
The White House earlier had threatened to veto any legislation that stopped the deal. But the administration’s hand was forced after the House of Representatives Appropriations Committee voted 62-2 to prevent DP World from acquiring control of the US port operations.
Concern about reprisals
The US Chamber of Commerce expressed concern at potential reprisals against US companies by foreign governments over the affair.
“We need to have more access to more markets abroad, not less access,” Bruce Josten, executive vice president for government affairs at the US Chamber of Commerce said.
“Retaliation precipitated by Congress will not only harm US employers but employees as well. If we start losing markets, you’re going to see shuttering of plants. People are going to lose their jobs,” he said.
But Representative Peter King, one of the Republican lawmakers who went to see Mr Bush about the issue, rejected the concerns.
He called it “a unique case”. Congressman King highlighted the UAE’s previous recognition of the Taliban government in Afghanistan and insisted there was a difference between allowing a British company and a UAE company to control US ports.