Maersk says to split into 2 units: energy and transport
Danish conglomerate A.P. Moeller-Maersk A/S announced on Thursday that it is splitting into two separate units to generate growth, as it battles with the worst shipping downturn in years and a historic oil-price rout.
Maersk Line, the company’s biggest unit and the world’s largest container operator in terms of capacity, will spearhead a new Transport & Logistics unit, while the group’s extensive oil interests will be pooled under an Energy division that will either remain part of the Maersk group or be separated in the form of joint ventures, mergers or a listing.
Maersk stunned investors in June when it fired Chief Executive Nils Andersen and asked his replacement, Soren Skou, to look into breaking up the group and possibly selling or listing some of its units. Mr. Skou, who has headed Maersk’s shipping business, was instantly tasked with evaluating whether to disband the holding company.
The container industry has seen freight rates tumble amid a glut of tonnage in the water, prompting price wars between operators that have pushed freight rates to levels barely covering fuel costs. Meanwhile, nearly two years of low crude-oil prices have hit Maersk’s energy unit hard.
Thursday’s shake-up comes amid a wave of consolidation sweeping the container-shipping industry, as a number of big companies in recent years have combined forces to cut costs and increase competitiveness, while others, such as South Korea’s Hanjin Shipping Co., haven’t been so lucky.
Hanjin, one of the world’s largest shipping lines, last month stopped taking new cargo after it filed for bankruptcy protection. A South Korean bankruptcy court has ordered the company to return the ships it charters back to their owners and to sell as many of its own ships as possible.
At the same time, operators have been scrambling to form alliances, broad operational partnerships that have allowed them to cut costs without a full-blown merger or takeover.
Hapag-Lloyd AG is merging with Dubai-based United Arab Shipping Co., and most of the world’s top dozen operators are part of alliances.
Maersk is controlled through a foundation by its founding family, which built the business from a steamship company started in 1904.
Source: MarketWatch
