(Bloomberg) — A.P. Moller-Maersk A/S has agreed on the second-largest takeover in its history with the purchase of an Asian warehouse giant.
Maersk, the world’s biggest container line, will pay $3.6 billion in enterprise value for Hong Kong-based LF Logistics, it said on Wednesday. The deal is second only to its $4 billion takeover of Hamburg Sued in 2017.
Maersk, which transports about a fifth of the world’s containers at sea, is pursuing a new strategy to expand in land-based logistics where there’s more potential for growth and profit margins are higher. Earlier this year, the Copenhagen-based carrier also announced plans to buy air-freight company Senator International as it seeks a presence in all parts of the transport chain.
With the purchase, Maersk gets an additional 10,000 employees and more than 200 warehouses in 14 countries. Maersk will boost annual revenue in its logistics and services business by about $1 billion with the acquisition.
The sellers are Li & Fung Ltd., which owns 78.3% of LF and Temasek Holdings Pte., which has the rest. Maersk said it’s paying a multiple of 14.4, based on enterprise value to earnings before interest, tax, depreciation and amortization.
The deal comes as Maersk is making record profits from a surge in freight rates. The price for transporting containers has skyrocketed as bottlenecks in the global supply chain have, in effect, removed about 15% of the world’s shipping capacity. Maersk is set to book 2021 net income of $17 billion, or six times the result in 2020, according to analyst estimates.
The acquisition excludes LF’s freight-forwarding unit, which will remain with the owners. Maersk has previously said it won’t pursue freight forwarders, but would instead focus acquisitions on companies with logistics assets or specialized technology.
The transaction is expected to close in 2022, pending regulatory approvals.
Swiss-Italian container shipping line MSC Group on Monday offered to buy the African assets of the logistics unit of Bollore Group for $6.4 billion in enterprise value. Maersk had reportedly been looking at the deal, along with other transport companies.
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