HIGHLIGHTS
- Maersk, the world’s largest container shipping firm, has agreed to buy LF Logistics for $3.6 billion.
- Maersk acquired LF Logistics, which added 223 distribution sites across Asia, including 49 warehouses in China and nearly 10,000 employees in 14 Asian nations.
- Maersk, on the other hand, has expanded its operations from maritime freight to domestic logistics as a result of the acquisitions.
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The acquisition of LF Logistics
Maersk, the world’s largest container shipping business, has agreed to purchase LF Logistics from Li & Fung Ltd, a Hong Kong-based supply chain management, and Singaporean investor Temasek, which has a 22 percent investment in the company. The deal is expected to close in 2019 for $3.6 billion.
The transaction is expected to finalize in 2022. It comes less than six months after Maersk paid over $1 billion for two logistics and e-commerce companies in the United States and Europe in August.
Maersk acquired LF Logistics, which added 223 distribution sites across Asia, including 49 warehouses in China and nearly 10,000 employees in 14 Asian nations. Furthermore, Maersk will take over from LF Logistics in delivering land-based services such as warehousing and trucking to over 250 global customers.
This is, by far, Maersk’s greatest acquisition to yet. Maersk had already acquired a number of companies, including logistics and e-commerce firms, an air freight forwarder, and a smaller rival Hamburg Sud.
The ambition of Maersk
The acquisition of LF Logistics has assisted Maersk in strengthening its “presence” in the ocean freight sector, which is the group’s core business. At the same time, Maersk aims to extend into domestic logistics.
Maersk, on the other hand, has expanded its operations from maritime freight to domestic logistics as a result of the acquisitions. The reason for this is that Maersk wants to acquire a larger part of the freight flow between ports in Asia and the United States, as well as from ports to warehouses or businesses and even delivery to end consumers.
In four years, Maersk plans to “turbo-charge” LF Logistics by increasing sales to $2 billion and operating profit to $500 million. Maersk would control 549 warehouses worldwide and expand total warehouse floor capacity by 40% as a result of this transaction, making it the world’s seventh largest contract logistics company after UPS, DHL, and Kuehne + Nagel.
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