Maersk is the biggest container shipping line in the world. Nonetheless, the company continues to expand its operations. The company from Denmark made an important announcement on Wednesday. It reached an agreement to acquire LF Logistics, a Hong Kong-based contract logistics company for $3.6 billion. The deal is subject to regulatory approvals and is expected to close in 2022 according to Maersk.
As of December 2021, the Hong Kong-based company operates an extensive pan-Asian network with 10,000 people, and 223 warehouses as well as fulfilment centers. It is worth mentioning that, the company operates facilities in 14 countries. As a reminder, LF Logistics is privately owned by Li & Fung (78.3%) and Singapore sovereign wealth fund Temasek Holdings (21.7%). Interestingly, Li & Fung is an investment holding company that engages in trading and supply chain management for various brands.
Last year, LF Logistics reported revenue of nearly $1.3 billion. It reported adjusted earnings before interest, taxes, depreciation, and amortization of about $235 million.
Maersk and its rivals
Huge ocean rates resulting from ocean shipping bottlenecks pushed Maersk to record profits. Maersk is investing the proceeds to expand beyond ocean fright to become a turnkey third-party logistics provider. It wants to become a provider that can meet the varied supply chain needs of multinational companies. With direct access to vessels, aircraft, as well as warehouses Maersk can guarantee capacity to its best customers.
Maersk acquired three European e-commerce companies in 2021. It also agreed to purchase Senator International.
Other companies are also pursuing similar strategies to become one-stop supply chain and logistics shops that offer cargo owners more resilient supply chains and downstream visibility for freight transportation.
In 2019, CGM acquired Ceva Logistics. This year, CGM started a cargo airline and this month agreed to purchase the e-commerce division of Ingram Micro.
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