223 additional warehousing facilities worldwide!

223 additional warehousing facilities worldwide! - Hangzhou MedAsia

Maersk to enhance logistics capabilities in Asia Pacific through acquisition.

On December 22, A.P. Muller Maersk (MAERSKa) ("Maersk") announced that it has reached an agreement to acquire LF Logistics, a contract logistics company headquartered in Hong Kong, China, in a transaction valued at US$3.6 billion, subject to regulatory approval, according to Maersk Group WeChat. The acquisition, which is subject to regulatory approval, is expected to be completed in 2022.

223 additional warehousing facilities worldwide

According to the introduction, Li & Fung Logistics is a private company jointly owned by Li & Fung Limited and Temasek Holdings, with Li & Fung and Temasek holding 78.3% and 21.7% of the shares respectively. Li & Fung Logistics consists of two business units: Domestic Logistics and Global Freight Management.

Established in 1906, Li & Fung Limited now operates one of the most extensive global supply chain networks in the world. It employs approximately 15,000 people in over 230 offices and distribution centers in 40 different markets.

Founded in 1999, Li & Fung Logistics is focused on providing contract logistics solutions to customers in the Asia Pacific region and operates independently of Li & Fung, with 223 warehouses and distribution centers in 14 countries around the world, with a total floor space of 2.7 million square meters.

For the full year 2020, Li & Fung Logistics' revenue was US$1.3 billion and adjusted EBITDA was US$235 million.

Søren Skou, CEO of Maersk, said, "This acquisition helps strengthen the company's logistics business capabilities in the Asia Pacific region to support our customers in achieving long-term growth in the region, and enhances the company's skills and capabilities in expanding its global contract logistics business."

According to the report, the acquisition will add 223 warehouses to Maersk's existing asset portfolio, bringing its global warehousing facilities to 549, with a total footprint of 9.5 million square meters.

As part of the Li & Fung Logistics acquisition transaction, Maersk has entered into a strategic partnership with Li & Fung to develop a range of integrated global end-to-end supply chain services, with Li & Fung focusing on the upstream supply chain and Maersk focusing on the downstream supply chain, Maersk said. In addition, upon completion of the transaction, Li & Fung's parent company is expected to acquire and continue to operate and build its global freight management business.

Maersk is an integrated container shipping and logistics company that is part of the A.P. Muller Group, according to its website. Dedicated to connecting and simplifying global trade, it employs more than 80,000 people and has operations in 130 countries and territories worldwide.

According to Maersk's third quarter report, Maersk's revenue increased 68% to $16.6 billion in the third quarter, EBIT increased nearly five times to $5.9 billion and EBITDA increased three times to $6.9 billion.

In the ocean freight segment, freight rates continued to be high, with third quarter revenue nearly doubling to $13.1 billion from $7.1 billion a year ago, EBIT up $4.4 billion to $6.3 billion and EBITDA up $4.4 billion to $5.3 billion. Long-term contracts increased to 64% of ocean cargo volume from 50% last year.

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