Maersk is to buy LF Logistics for about $ 3.6 billion

AP Moller-Maersk

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A / S on Wednesday said it had agreed to buy LF Logistics for about $ 3.6 billion, including lease liabilities, which would give the shipping company a network of warehouses.

Maersk, the world’s largest container shipping line, has been reaping the benefits of disturbed global supply strains, pushing freight rates to record levels this year. Recessions in US ports.

The Port of Los Angeles, California, is struggling to sustain the crushing of cargo containers coming to its terminals, making it one of the biggest suffocation points in the global supply chain crisis. This exclusive aerial video explains the purpose of the problem and the complications of this process. Photo: Thomas C. Miller

Utilizes expansion acquisitions in domestic logistics beyond marine cargo. Wants to capture a large share of the market for moving goods between Asian and American ports, then from ports to warehouses or businesses and up to the last mile to a person’s home.

By acquiring LF Logistics, Hong Kong Supply Chain Manager Li & Fung Ltd. As part of, Maersk gains control of 223 distribution centers across Asia and a network of more than 250 customers worldwide, according to LF’s website. LF also provides freight forwarding services to retailers, manufacturers and other inventory owners. The Wall Street Journal previously announced that a deal was imminent.

The deal is expected to end in 2022. It comes six months after Maersk Acquired two e-commerce logistics companies In August — one in the United States and one in Europe — the total was nearly $ 1 billion. The LF acquisition will reduce these deals, but the Copenhagen-based company has already identified its appetite for large acquisitions with its strong revenue growth.

Maersk posted $ 5.44 billion profit in the September quarter. More than five times the profitA year ago, the results were weighed down by the recession as a result of epidemic controls. Revenue rose 68% to $ 16.61 billion amid rising freight rates.

The LF deal is Merskin’s biggest move so far Domestic logistics business It hopes to eventually bring in half of the group’s revenue. At the moment, about 80% of revenue comes from marine activities.

Maersk will pay twice as much as LF Logistics’s value of $ 1.4 billion in 2019, when it acquired a nearly 22% stake in Singapore-based Temasek Holdings Limited.

The Geneva-based Mediterranean Shipping Company, Maersk’s best competitor, on Monday offered to buy the French – based group’s African logistics assets for $ 6.4 billion.

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If the deal goes through, it will provide control of 16 terminals in Ivory Coast, Ghana, Nigeria and Gabon to MSC with three train concessions.

France’s CMA CGM SA, the world’s fourth largest container ship operator, acquired Ceva Logistics AG, a Swiss-based freight service provider, in 2019 for $ 1.7 billion.

Mersk has about 70,000 seafaring customers, including American retailers, car makers, furniture suppliers, electronics makers and apparel importers. But less than a quarter of those customers use the company to move their goods from ports to warehouses and distribution centers.

Maersk signs four-year agreement with British-based consumer product company in early December

Unilever

PLC to manage sea and air freight.

Maersk’s last major acquisition was the acquisition of Hamburg Süd in 2017 for $ 4.2 billion, confirming its leading position in container shipping.

Write to Ben Dummett [email protected] and Costas Paris at [email protected]

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In the print edition released on December 22, 2021, ‘Maersk Seeks Big Logistics Purchase.’

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