Maersk is looking for acquisitions to boost its logistics operations on land as the world’s largest container shipping company tries to broaden its appeal to big shippers of goods.
Soren Skou, chief executive of the Danish company, told the Financial Times that the next few years would see Maersk push the parts of its business not to do with the ocean, such as trucks, supply chain management and running warehouses.
“The future will be very much about scaling the land side of the equation . . . We for sure have to do some acquisitions in the logistics space, primarily to gain capability and scale,” Mr Skou said.
Maersk has broken itself in two in the past two years, disposing of almost all its oil and energy businesses and trying to shed the tag of conglomerate.
It paid $4bn to buy Hamburg Süd to cement its position as the number one container shipping line and is now trying to integrate that and its other businesses — including port terminals and land logistics — into one company.
“A little less than 20 per cent of our customers buy the land side [of logistics] from us. But 100 per cent of them need a truck to get to and from the port,” Mr Skou said.
Chief executive for the past two-and-a-half years of the transformation, Mr Skou said that any acquisitions were likely to be bolt-on ones rather than multibillion-dollar deals, not least because Maersk’s balance sheet is under pressure.
He said that net debt was likely to be below $10bn by the end of 2018, having started the year at $15bn. But credit rating agencies have cited the company’s growing dependency on a weak shipping industry as reason to downgrade it. Moody’s this month cut Maersk’s rating to the lowest possible investment grade due to the volatility and cyclicality in shipping.
Mr Skou said that remaining investment-grade rated “is important for us” and stressed the company had a focus “on a strong balance sheet”.
As for possible acquisition targets, he noted that Maersk was involved in each part of the land side of logistics such as trucks and warehousing “some at scale, some not”. He added: “Our vision is that customers can buy everything they need for their global supply chain from Maersk.”
Maersk is a leader in supply chain management for retail groups, managing warehouses internationally for the likes of Nike, Adidas, Walmart and Home Depot. “We would like to do that supply chain management business in other industries. If we can acquire that capability or customer set, we would do that,” said Mr Skou.
Geographically, he said the focus would be on the same regions as Maersk is strong in for container shipping, such as Africa, Latin America and India as well as some growth in Europe and the US.
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