Case Studies

DP World is a state-owned port operator from Dubai. In March 2006 the firm attempted to enter the US market by finalizing purchase of management contracts for six major United States ports, along with over a dozen smaller port operations. The contracts were previously foreign-owned by Peninsular Oriental Steam Navigation Company, a British firm.

The Challenge: Though the sale to DPW was approved by CFIUS (the multi-agency federal panel that passes judgment on deals with foreign corporations that raise antitrust or national security questions), various United States political figures argued that the takeover would compromise U.S. port security. Subsequently, legislation was passed to stall the sale pending further review.

Andreae and Associates was tasked to minimize the negative press generated by DP World’s acquisition, and re-portray the firm (and the UAE) to Washington DC as a safe investment partner for the US and part of a modern, Westernized society.

The Solution: a political outreach campaign directed at key policy makers throughout Capitol Hill and the White House, including Departments of State and Treasury, DHS, and several other House and Senate committees. The campaign included media monitoring and response, letters to the Hill, and personal meetings by DP World management.

The Result: Though DP World ultimately volunteered to sell its acquisitions, its government affairs efforts were successful in several regards. First, many policy-makers in Washington now view the firm as a potential partner in port security. To that effect, the Department of Homeland Security is well into its testing phase for a new freight scanning initiative for 100% of inbound cargo. Several of the foreign ports chosen for this activity are operated by DP World.

Second, in many ways the path has been prepared for DP World to re-enter the US market if it chooses to do so, and it will be met with much less opposition.

With the exception of a few very outspoken critics, many of the original opponents of the deal have subsequently indicated that the original roadblocks were an overreaction – a result of political pandering.

Third, it is important to note that DP World was not forced to exit the market quickly and sell at a loss. The sale price was never publicized, but DP World ultimately made a profit and was allowed sufficient time to manage its bidding process.

Forth and finally, Andreae and Associates' campaign paid off as DP World was finalizing its sale of the ports to a US entity. When local port authorities raised several barriers regarding tax and investment issues, many policy makers advocated on DP World's behalf, including Senator Schumer – previously DP World's biggest critic. The Port Authority was persuaded to back off and allow the transfer to occur.