DP World engages M&A advisors for Jebel Ali Free Zone sale

15 July 2021 Consultancy-me.com 2 min. read

Dubai-based trade and logistics giant DP World has tapped M&A consultants to help sell a stake in Jebel Ali Free Zone (Jafza) – a thriving special economic zone in Dubai that supports nearly $100 billion in trade.

DP World first picked up a stake in Jafza for over $2.5 billion in 2014. Then state-owned, the logistics giant was privatised last year – and is now looking to raise capital and strengthen its balance sheet through the sale of equity stakes in some of its Jafza assets. 

Dealmakers from banking stalwarts JP Morgan, Standard Chartered and First Abu Dhabi Bank have all been called in to support the sale, with other consultants involved in the deal (strategic, financial) unknown at the time of writing. The advisory team is tasked with gauging interest in the Jafza stake and finding potential buyers – of which there will likely be many. 

Aerial view of Jebel Ali port

Jafza was set up in 1985 as a free economic zone, enabling 100% foreign ownership with no restrictions on capital repatriation, currency, or foreign recruitment – all under a regime of 0% corporate tax, income tax and import/export duties. And these are just a few of the region’s benefits. 

The zone was setup to attract foreign investment, and has done just that. A set of around 20 companies that began in Jafza has now grown into a troupe of over 8,000 businesses from more than 100 countries – including nearly 100 of the Global Fortune 500 companies. With a trade value of $99.5 billion, Jafza contributes nearly 24% of Dubai’s GDP and supports over 135,000 jobs. 

This is in addition to drawing roughly 24% of Dubai’s foreign direct investment – a mouthwatering prospect for investors and potential buyers. Publication Mubasher suggests that a stake in Jafza will be right up the street for certain infrastructure funds, private equity players and other institutionalised investors in the region. 

A sale would raise much needed capital for DP World – a global specialist in ports, parks & economic zones, logistics, maritime services and smart trade. The recently privatized firm has a global headcount of more than 53,000 spread across over 130 countries, and will benefit from a much needed capital injection.