Case | HBS Case Collection | September 2006 (Revised August 2007)

The Dubai Ports World Debacle and its Aftermath

by Julio J. Rotemberg

Abstract

Describes the political ramifications in the United States of Dubai-based DP World's acquisition of London-based Peninsular and Oriental Steam Navigation Company (P&O). Because P&O operated some port terminals in the United States, DP World obtained clearance from the Committee on Foreign Investments in the United States before P&O shareholders approved the deal in February 2006. Nonetheless, a ruckus over port security erupted both in Congress and in the press and this ruckus led DP World to promise that it would relinquish the U.S. terminals of P&O. Also contains a brief description of Dubai and its relationship to the U.S., a discussion of issues related to port security, and a brief history of U.S. security concerns with foreign direct investment. Ends with a depiction of the Bills passed unanimously by the U.S. House and Senate to further regulate foreign investment in the wake of the DP World debacle.

Keywords: Foreign Direct Investment; Multinational Firms and Management; Governing Rules, Regulations, and Reforms; Government Legislation; National Security; Business and Government Relations; Ship Transportation; Dubai; United States;

Citation:

Rotemberg, Julio J. "The Dubai Ports World Debacle and its Aftermath." Harvard Business School Case 707-014, September 2006. (Revised August 2007.)