In March 2006, it purchased the Peninsular and Oriental Steam Navigation Company (P&O) of the United Kingdom, which was then the fourth largest ports operator in the world, for £3.9 billion ($7 billion), beating a bid from Singapore's PSA International of £3.5 billion. P&O is one of the most famous names in British business, having been the largest shipping operator in the world at one time. DP World has promised to keep P&O's headquarters in London.
DP Terminals was founded in 1999 and DP World was created by a merger between the Dubai Ports Authority (DPA) and an international business, DPI Terminals.
On February 22, 2006, President George W. Bush threatened to veto any legislation passed by Congress to block the deal, which would be the first time in his presidency he would exercise the privilege. In a statement to reporters, Bush claimed, "It would send a terrible signal to friends and allies not to let this transaction go through." Supporters of the deal claimed that the UAE were friendly to America, as the emirates allow U.S. warships in the Gulf to dock in their ports and re-supply their ships with oil, food and other goods for free. Crew members are allowed shore leave in the country and entertain themselves free in malls and movie theaters.
The controversy has created a public and unusually high-profile dispute within the Republican Party, and between the Republican-controlled Congress and the Republican-controlled White House.
The debate has curiously divided the opposing sides into mixed camps, with the New York Times, Lindsey Graham, The New Republic, Sean Hannity, Michael Savage, Laura Ingraham, Bill Frist, Chuck Schumer, Hillary Clinton, Bob Menendez, Frank Lautenberg, John Gibson, Jon Corzine, the New York Post, and Peter T. King opposing it, while the Wall Street Journal, the Los Angeles Times, the Washington Post, Rush Limbaugh and Bill O'Reilly supporting it.
On February 23, 2006, DP World volunteered to postpone its takeover of significant operations at the seaports to give the White House more time to convince lawmakers and the public that the deal poses no increased risks from terrorism.
DP World said on March 9, 2006, that it would transfer its operations of American ports to a "U.S. entity" after congressional leaders reportedly told President Bush that the firm's takeover deal was essentially dead on Capitol Hill. According to a report on June 19, 2006, however, Dubai Ports World still owned and controlled operations at 22 U.S. ports.
The United States House of Representatives held a vote on March 16, 2006 on legislation that would have blocked the Dubai Ports World deal, with 348 members voting for blocking the deal, and 71 voting against. The provision to block the deal was a part of a larger bill on emergency supplemental appropriations. The Dubai provision was cut from the final bill passed by the United States Senate and then approved by both houses.
On July 18 2006, U.S. Reps. John Murtha (D-Pennsylvania) and Walter B. Jones (R-North Carolina) held a press conference claiming that the US-Oman Free Trade Agreement would allow Dubai Ports World and similar firms to set up subsidiaries in Oman, and use the trade agreement's "right of establishment" to lay claim to U.S. ports operations. If Congress attempted to block an Omani-incorporated subsidiary of Dubai Ports World from such a claim, then the company could use the pact's investor rights provisions to demand compensation if the congressional move were not reversed. The same day, the Congressional Research Service issued a report on the matter that, while disputing some aspects of Murtha's claims, did not dispute that Dubai Ports World and other companies could use the Oman trade agreement's provisions to challenge any such U.S. action.
Dubai Ports World eventually sold P&O's American operations to American International Group's asset management division, Global Investment Group for an undisclosed sum.