Waking up to find the port industry has a new “trendsetter.” Recently, Brookfield Asset Management sold a 49% stake in UK port operator PD Ports, with the buyer being a company under Antonio Ortega, founder of the fashion brand Zara. The transaction has yet to receive regulatory approval, and the specific amount remains undisclosed.
Overseas media were surprised by this deal, and even insiders are puzzled. Could it be that fast fashion’s control over the supply chain has now extended from factories to docks?
PD Ports originated as a coal mining company, acquiring the Tees and Hartlepool Port Authority in 1992 and shifting its focus to port operations. Since then, the company’s ownership has changed hands multiple times: in 2000, it was acquired by Nikko Securities for a valuation of £507 million; in 2004, it was purchased by a securities brokerage for £450 million; in 2005, it was acquired by an Australian infrastructure investment firm for a total of £337 million; and in 2009, Brookfield bought PD Ports for a symbolic AU$1 while assuming AU$113 million in debt.
Currently, PD Ports operates 11 ports and other storage facilities in the UK, including Teesport and Hartlepool. Its core asset, Teesport, is the sixth-largest port in the UK and boasts one of the country’s deepest multipurpose terminals, handling approximately 28 million tons of cargo annually. Teesport also has two container terminals with an annual throughput capacity of 650,000 TEUs. Serving as the northern gateway to the UK, the port contributes around £140 million to the British economy each year.
To be honest, this isn’t a particularly large port group, and its terminal assets aren’t top-tier. Throughout its ownership changes, PD Ports’ valuation has declined rather than risen, and it carries significant debt. In 2021, Brookfield attempted to sell its entire stake but accused bidders of using litigation to drive down the price. According to insiders, Brookfield sought around £2 billion, while buyers offered between £1.1 and £1.4 billion. Ultimately, Brookfield halted the sale.
This time, when Brookfield reopened bidding, another major UK terminal operator, Peel Ports, initially participated but withdrew in April. So why would Zara’s founder still take on this asset? Is it a case of having money to burn? Quite possibly.
Ortega currently has a net worth of approximately €103 billion, making him Spain’s richest person and ranking 13th on Forbes’ global billionaires list—truly wealth rivaling nations. He holds a 59% stake in Zara’s parent company, the world’s largest publicly traded fashion retailer, which distributes substantial dividends annually. Without reinvestment, he would face hefty wealth taxes. This year alone, Ortega received over €3 billion in dividends.
In the current economic climate, some port assets may not seem particularly attractive within their verticals, but compared to other investment options, they might appear more appealing. Brookfield retains controlling ownership of PD Ports, while Zara’s founder sees value in the stable and secure cash flow that port assets can provide—a solid long-term investment in a downturn.
