The Port Deal -- Yet another arm of the ignored Octopus of Mergermania

[Armstead]

One asepct of this port deal that is as troubling as anything. The trend towards consolidation of the transportation and shipping industries.

It reflects the problems associated with one of the most serious -- and ignored -- economic issues of the last 30 years. Mergermania and the mantra that "Bigger is Better."

This is typical of what has been happening in every sector of the economy -- retailing, manufacturing, financial services, THE MEDIA.

And after 30 years of this relentless consolidation -- which is Empire Building plain and simple -- the Democrats still sit around with thumbs upbutts instead of attacking the source of this issue that is undermining our economy and our society.

When the hell are we going to wake up about this, and stop enabling this trend?

[Armstead]

1. Kick -- I hate to see a good little rant go to waste

[Armstead]

2. From Oligopoly Watch

Port management consolidation
http://www.oligopolywatch.com/2005/11/30.html

Dubai Ports World announced the acquisition of UK-based P & O in a $5.8 billion deal. The deal will create the #3 port facility management in the world, combining #4 and #7. It is likely that rival offers will be made from companies like Hutchison Whampoa, Temasek Holdings, or AP Moller-Maersk, so the acquisition is not yet certain.

P & O (officially Peninsular & Oriental Steam Navigation) was founded in 1840 and had a history of domination connected with the growth of the former British Empire. It owns port facilities at over 100 cities in 1`8 countries around the world. Until recently, it was a main operator of channel ferries from England to the mainland. That business was spun off and merged with a rival after the building of the Eurotunnel. It also at one point unloaded its P & O Princess cruise line to Carnival Cruise Lines in 2004.

The two leading ports operators in the world are also headquartered in Asia, namely Hong Kong's Hutchison Whampoa and Singapore's PSA International. That makes sense, as Asia is the center for a new explosion in world trade. The Dubai World company is owned by the royal family of Dubai, which has lots of money to spend, thanks to record oil profits.

A Wall Street Journal article ("Dubai Ports Offers to Pay $5.76 Billion for P&O", 11/29/05) sees the roll-up of the ports and containerized shipping industry as an ongoing process.

The deal marks the latest step in the rapidly consolidating industry of ports and container shipping, which remains the most popular mode of transportation for moving goods around the world. As the big container-shipping companies combine into global giants, port operators have been looking to have a bigger stake in the various ports that load and unload the cargo to better negotiate long-term contracts with the shippers.

The container-shipping mergers have been spurred largely from the increasing global trade with China and other manufacturing centers in Asia.

Among the recent deals cited in the WSJ article are:

Dubai Ports bought the port facilities of US-based CSX Corp or $1.1 billion
German TUI is in the process of buying UK-based CP Ships for around $2.5 billion
A.P. Moeller-Maersk bought container shipper Dutch Royal P&O Nedlloyd for $2.7 billion
UK-based PD Ports also recently accepted a $340 million buyout form private equity.
Port management consolidation