State-backed Dubai Ports World yesterday agreed to buy UK ports and ferries group P&O - which has an operation at Hams Hall freight terminal near Birmingham - for £3.3 billion.
In a deal which will create the world's third largest ports company, Dubai Ports offered 443 pence per share in an allcash bid for the 165-year-old British maritime icon as part of an ambitious expansion strategy which has seen the Gulf company grow rapidly in Asia.
The offer price was a 46 per cent premium to P&O's trading price before October 30 when P&O confirmed it had been approached by a potential bidder.
The deal follows a string of recent takeovers of major British companies.
It is also the latest big purchase by Dubai-government linked firms scouring the globe for assets to invest the Gulf emirate's mountain of oil cash.
Analysts said a rival bid now appeared unlikely. Hong Kong-based Hutchison, Singapore government investment agency Temasek and Denmark's Moeller-Maersk had been rumoured as potential counter bidders.
"P&O's board has unanimously recommended the offer and together with provisional acceptances for 19 per cent of
the group's shares a counter offer is unlikely," said Investec analyst John Lawson.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "P&O has been on a slow course towards becoming a focused ports operator over recent years with the de-merger of its cruise liner business into what is now Carnival Corporation and the listing of housebuilder Bovis Homes.
"While it represents a significant premium over the P&O share price just before the bid came to light, investors are likely to sit tight and await developments given speculation surrounding other possible approaches."
Dubai Ports said it planned to retain P&O's management, staff and UK-France ferries business. It said the deal was about expansion rather than cost-cutting.
"This clearly fits into the broader strategic picture given Dubai's ambitions to position itself as a hub, not just of shipping but of business," said Zahed Chowdhury, head of research for HSBC in Dubai.
Analysts and Dubai Ports executives said they did not anticipate any regulatory opposition. The deal is expected to be finalised by the first quarter of next year.
P&O chairman John Parker said the company had not received any rival approaches from third parties.
Dubai Ports chairman Sultan Ahmed Bin Sulayem, one of Dubai's most powerful businessmen, said P&O would remain headquartered in London, adding that chief executive Robert Wood would stay on.
One of the sticking points was P&O's pension deficit.
Dubai Ports agreed to inject £125 million into the UK firm's pension scheme.