DP World acquiring 2 Chilean port terminals for US$500mn

Monday, January 14, 2019

Dubai-based port operator DP World agreed to buy a 71.3% stake in Chile's Puertos y Logística (Pulogsa) from Minera Valparaíso and other shareholders associated with the Matte business group, marking the Middle Eastern firm's entry into Chile's port sector.

Pulogsa operates the Puerto Central container terminal (in photo) at San Antonio port in Valparaíso region under a concession and the Puerto Lirquén multipurpose terminal at Lirquén port in Biobío region.

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DP World plans to acquire the stake via a public tender offer on the Santiago stock market for 100% of Pulogsa's shares, paying up to US$502mn, the firm said in a release.

"We are delighted to extend our global footprint with a major entry into Chile, Latin America's most developed economy, with attractive growth prospects and a dynamic business environment," DP World's CEO and group chairman Sultan Ahmed Bin Sulayem said.

The operation will be financed via existing resources and is expected to close during the first half of this year. As a result, DP World will operate at five ports in Latin America, the others being Posorja in Ecuador and Peru's Callao and Paita.

In a disclosure, Minera Valparaíso said the operation will have a US$70mn positive extraordinary impact on its earnings.

Meanwhile, Minera Valparaíso CEO Martín Costabal told daily El Mercurio that DP World pledged to invest in the growth of both the Chile terminals.

The other major shareholder in Pulogsa is the Angelini group, which owns 23% of the operator through Celulosa Arauco y Constitución (20.3%) and holding Copec (3.04%).

Costabal said the Angelini group is expected to accept the DP World offer as it has been interested in selling its stake since 2017.

Aaccording to Pulogsa's latest annual report, the terminals handled 9.9Mt in 2017, up 27% from the previous year. Figures for 2018 have not yet been released.

According to Chile's economy ministry, during last year the country's ports handled 37Mt, down 21% from 2017 due to the effects of the trade spat between the US and China.