The curious case of Adani firm's costly acquisition of Israeli port
As per media reports, Adani Ports and Special Economic Zone Limited (APSEZ) in Israel, the business won a competition to privatise Haifa port, Israel's second biggest port, last Thursday in collaboration with Israel's Gadot Group. The consortium's Indian partner will own 70% of the company, while the local partner would own 30%.
FollowThe Adani Group's acquisition of the Haifa port last week for USD 1.18 billion is being viewed as a "strategic purchase" where "price was less important" given the difference in quote between the Indian conglomerate and its closest competitor in the bidding process.Â
As per media reports, Adani Ports and Special Economic Zone Limited (APSEZ) in Israel, the business won a competition to privatise Haifa port, Israel's second biggest port, last Thursday in collaboration with Israel's Gadot Group. The consortium's Indian partner will own 70% of the company, while the local partner would own 30%.
According to the daily Ha'aretz, dani Ports offered 4.1 billion shekels (USD 1.18 billion) for the port, which was 55% more than the second highest proposal.Â
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This is a far higher price than the Israeli government had anticipated, with a price-to-earnings ratio of 18. (roughly calculated, based on the average of the past three years). Indeed, when local groups seeking to acquire the port learned the sum Adani Ports had offered, they all backed out, according to the report.
The bid came just as the leaders of I2U2, which includes India, Israel, the United States, and the United Arab Emirates, were holding a virtual conference, with Prime Minister Narendra Modi and UAE President Mohammed Bin Zayed joining online Israeli Prime Minister Yair Lapid and visiting US President Joe Biden from Jerusalem. Some perceive the new quad as an attempt to challenge China's rising influence.
Adani's firm has 13 marine ports in India and handles 24% of the country's maritime trade. He has no interests in the West, therefore his presence into Israel signals greater marine commerce between Asia and Europe, as well as the demand for a Mediterranean centre by key Asian companies, according to the article.
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Israel anticipates that Adani's entry into the Israeli market would result in increased Indian investment, particularly in renewable energy and defence. The Adani company is already working with prominent Israeli defence firms to establish a drone manufacturing centre in India. Ha'aretz noted that another anticipation that has developed is the development of a rail link from Haifa Port to Jordan, fueled by the idea of a new Middle East.
(With PTI Inputs)
