Dubai Company Drops Port Deal

Under Pressure, Dubai Company Drops Port Deal - New York Times: "The action averted a showdown with Congress that Mr. Bush was all but certain to lose, as signaled on Wednesday by a 62-to-2 vote of the House Appropriations Committee to reject the transfer, because it allowed the sale of some terminal operations to an Arab state company.

Private equity firms, including the Blackstone Group in New York and KKR, have been named as potential buyers of the American terminal operations, which are a small and not particularly lucrative slice of the $6.85 billion Dubaian purchase.

The collapse of the deal is the second time in less than a year in which a foreign acquisition raised protests about the economic security of the United States. Cnooc, a Chinese government-owned oil company, dropped a bid to buy Unocal in July, after it was clear that opposition would run high. Chevron took over the company instead, for $18 billion.

What appeared to set off Democrats and Republicans this time, against the backdrop of concern about possible terrorist attacks, was that the buyer was a state-owned Arab company. Mr. Bush and his aides issued a strong defense, suggesting that racial bias lay at the core of the objections and warning that an undercurrent of isolationism would ultimately harm American efforts to enlist other nations in antiterrorism campaigns."