Within days of the DP World bid being announced, P&O shares had soared by 12% to 494.5 pence amid rumours that Temasek was considering a bid.

DP World said it planned to keep P&O's headquarters in London, with chief executive Robert Woods continuing to head what would be run as a separate business. There is no expectation of job cuts for a global workforce of 22,000.

P&O operates 29 container terminals and logistics operations in more than 100 ports whilst also running ferries between the UK and France, Belgium, the Netherlands, Ireland and Spain.

Ferry operations have struggled in recent years but DP World plans to restore them to 'strong profitability' in 2006. On the ports side, P&O is thought to be close to securing planning permission for a massive £1.5m Thames Gateway port development on the site of the former Shell Haven oil refinery east of London.

The deal would create one of the world's top three port operators, with the ambitious DP World's home operations at Port Rashid and Jebel Ali further augmented by a recent deal with the Chinese government to build a new £291m container terminal at Qingdao.

For P&O, founded in 1837, the deal would mean an end to 168 years of independence.

The company carried cargo throughout the British empire during its peak years and more recently delved into then divested itself of interests in property, cruise ships and container shipping.

DP World is one of several organisations seeking to purchase assets backed by the Dubai government's substantial cash reserves. Ports are a major beneficiary of expanding world trade, with the International Monetary Fund expecting world trade volumes to grow by 7.6% next year.

The trend for British port operators to be acquired by overseas interests continued days later with PD Ports, which operates the UK ports of Tees and Hartlepool, accepting a £320m takeover bid from the Australian backed company Endeavour Ports.

MJ Information No: 21322