Dubai Ports World Deal: The End Game

A threat by Congress to pass legislation stopping the purchase of Peninsular & Oriental terminal operation in the United States by Dubai Ports World has led Dubai Ports, which has closed its acquisition of P&O, to promise to "transfer" its United States operations to "a United States" company.  Congress declared victory and the country's economists and business community worry about the effect of the deal collapse on the position of the United States in the global trading system.  Ah, now the lawyer's take over.  What does it mean to transfer operation to a United States company?  Congress and the press is assuming that Dubai Ports will sell its terminal operations in six United States ports to a United States shipping or terminal company.  Names of purchasers are bantered about (Eller & Co., SSA Marine Inc., Marine Terminals Corp.??).  Not so fast.  The careful language of the press release could mean that Dubai will drop its United States operation into a wholly-owned subsidiary or into a joint venture between Dubai Ports and an American finance company.  The structure of the subsidiary will isolate the board of directors from any influence by Dubai Ports;  Dubai Ports will not "control" the sub.   There is ample precedent for such structure our defense industries.  The Department of Defense has approved acquisitions by foreign companies of United States defense related industries under such structures.  Congress will then have to get into the business of regulating business structure.  Stay tuned.  This is not over.