Adani Ports Acquires Israel Port for $1.2 Billion

Adani Ports Shares Rises After Winning Israel Port for $1.2 Billion

July 15, 2022

The shares of Adani Ports & Special Economic Zone Ltd. increased on Friday after the Israeli government awarded the Haifa Port to a joint venture led by the Indian port operator for 4.1 billion shekel ($1.2 billion). Israel's Finance Ministry announced late on Thursday that the firm, led by Asia's richest man Gautam Adani, and its partner Gadot Chemical Tankers and Terminal Ltd., will purchase 100% of the equity in Haifa Port in an effort to boost competition and boost productivity.

According to a statement from the firm, Adani Ports would own a 70% ownership in the joint venture, with Gadot holding the remaining 20%. Adani Ports' stock rose 0.9 percent in Mumbai on Friday, outpacing the benchmark S&P BSE Sensex's gain of 0.7 percent.

Check out Gautam Adani's tweet:

According to the petition, the port handles about half of Israel's container trade, and the businesses have been granted the license to run it through the year 2054. Given its declared goal of becoming the largest port operator in the world by 2030, this "may be a precedent for additional M&A by Adani," according to a note by Bloomberg Intelligence analyst Denise Wong.

"The purchase could expand Adani's global network and solidify relationships with shippers, but the near-term profit contribution may be minimal given increasing interest payments and development costs," according to the statement.

Global Footprint

After acquiring Holcim Ltd.'s Indian cement units for $10.5 billion in May, Adani's ports-to-power conglomerate's global presence has been expanding quickly. First-generation businessman Adani has been actively expanding his empire beyond the coal industry, where he made his money, into industries such as data centers, airports, digital services, media, and health care.

The statement from Karan Adani, CEO of Adani Ports, said, "In the short term, we look forward to developing strategic trade lanes between our ports in India and Haifa and help facilitate trade between the two countries." According to him, internal accruals will be used by the corporation to pay for its investment in the port.

The most recent extension to Adani Port will face competition from a new port in Haifa, run by Shanghai International Port (Group) Co., which was inaugurated in September.

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