Global Markets

Maersk approves $3.6 billion contract to buy LF Logistics

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Maersk agreed to buy Hong Kong-based LF Logistics for $3.6 billion in an all-cash deal on Wednesday, as it seeks to diversify beyond its core ocean freight business.

The purchase is one of the group’s largest to date, and it comes after a string of acquisitions that include e-commerce companies, an air freight forwarder, and its smaller rival Hamburg Sud.

“The acquisition will further strengthen Maersk’s capabilities as an integrated container logistics company, offering global end-to-end supply chain solutions to its customers,” the company said in a statement.

Maersk will purchase LF Logistics from its controlling shareholder Li & Fung Ltd, a Hong Kong-based supply chain manager, as well as Singapore state investor Temasek, which purchased 22% of the company in 2019.

The transaction is expected to be completed in 2022. LF Logistics provides land-based logistic services such as warehousing and trucking to over 250 global customers through a network of 223 warehouses and around 10,000 employees in 14 Asian countries.

Last year, the company made $1.3 billion in revenue. By 2026, Maersk expects to have more than doubled its revenue and operating profit, according to the company.

Story by : Norvisi Mawunyegah