AP Møller-Maersk to split in two
The Danish shipping and oil conglomerate confirmed that it will separate its businesses into stand-alone transport and energy divisions.
The Danish shipping and oil conglomerate confirmed that it will separate its businesses into stand-alone transport and energy divisions.
Danish shipping and oil conglomerate AP Møller-Maersk has confirmed plans to split its businesses into separate transport and energy divisions.
The group, which was the subject of a case study published by GTNews in May, said that the focus will be on establishing an integrated transport and logistics company, while its oil and oil-related business will either individually or in combination be separated as a stand-alone company.
A statement from the group read: “The board of directors expect that the oil and oil-related businesses will require different solutions for future development, including separation of entities individually or in combination from AP Møller-Maersk in the form of joint ventures, mergers or listing.
“Spending on market developments and structural opportunities, the objective is to find solutions for the oil and oil-related businesses within 24 months.”
The logistics businesses, particularly its container shipping unit Maersk Line, will seek growth through acquisitions. Maersk Line has recently gained businesses since the bankruptcy of South Korean competitor Hanjin Shipping at the end of August.
However, 11 of the world’s 12 biggest shipping companies are reported to be currently operating at a loss and Maersk Line itself reported a loss of US$107m for the first half of 2016. The industry as a whole could lose up to US$10bn this year on revenues of US$170bn, according to shipping consultancy Drewry.
The 112-year old group indicated in June that a break-up was a potential option when AP Møller-Maersk said that incoming chief executive officer (CEO) would review the alternatives available to its struggling shipping and energy operations.
“The industries in which we are operating are very different, and both face very different underlying fundamentals and competitive environments,” said chairman Michael Pram Rasmussen. “Separating out transport and logistics businesses and our oil and oil-related businesses into two independent divisions will enable both to focus on their respective markets.
“This will increase the strategic flexibility by enhancing synergies between businesses in transport and logistics, while ensuring the agility to pursue individual strategic solutions for the oil and oil related businesses.”