You're right about this being a loser for the President. With my background in advertising and corporate communications, I believe I can fill in what happened.
Obviously, DPW and P&O have been talking about this acquisition for some time. You don't just pull a multi-billion dollar deal out of your back pocket on a whim over lunch. The Saudis are extraordinarlily media savvy. They would have had a corporate p.r. firm getting their country into the news in a positive way, from America's point of view, starting many months ago. DPW didn't do that. Nobody clued them in that such a deal might run into a buzz saw in the United States. This amounts almost to corporate nonfeasance.
Second major problem, the Commerce Department did not communicate about the merger to any of the rest of the administration until the decision to approve the deal was made. That speaks volumes about bad communication within the Bush administration.