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Marine Log

February 24, 2006

DP World delays control of U.S. port acquisitions

In a London Stock Exhange announcement this morning, DP World said it would "segregate P&O's U.S. operations" while it engaged in further consultations. It said that "inn practice, this will mean that DP World will not exercise control over, or otherwise influence the management of, P&O's U.S. operations pending the outcome of these further discussions."

Following is the text of the announcement:

The acquisition by DP World of The Peninsular & Oriental Steam Navigation Company ("P&O") is a global deal covering 30 terminals in eighteen countries, ferries, and property interests at an acquisition cost of $6.85 billion. The U.S. assets represent less than 10% of this portfolio. It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed.

However, we appreciate that there are many people in the U.S. who have expressed concerns about DP World taking over the operations of P&O in the U.S., even though we have given formal commitments to the government of the United States that the management and structure presently in place at those ports will stay the same. We went through the legal approval process mandated by Congress that we were required to go through. Additionally, we passed every security standard in a review conducted by twelve separate departments and agencies of the U.S. government. Finally, we obtained all of the clearances required of other countries involved.

In light of this situation:

1. DP World intends that the acquisition of P&O will proceed as planned. P&O's shareholders voted overwhelmingly for the transaction. DP World intends that the closing and payment to P&O shareholders will take place on schedule.

2. DP World will segregate P&O's U.S. operations while it engages in further consultations with the Bush Administration and as appropriate Congressional leadership and relevant port authorities to address concerns over future security arrangements at P&O's U.S. ports, which are today in full compliance with all U.S. security requirements. In practice, this will mean that DP World will not exercise control over, or otherwise influence the management of, P&O's U.S. operations pending the outcome of these further discussions.

Ted Bilkey, Chief Operating Officer for DP World, said the following:

"DP World has been working for many years with U.S. Customs, Navy and other U.S. security officials at its ports in Dubai to ensure the protection of the United States. We are highly respected for the efficiency and integrity of our operations. The reaction in the United States has occurred in no other country in the world. We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody's business."

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