AP Moller-Maersk splits its shipping, energy operations

Maersk Line is currently facing a depressed shipping market that is weighed down by overcapacity and sluggish global trade

"Maersk said it will become "an integrated transport and logistics company with digitalized and individualized customer solutions" that will include the world's largest container shipping company Maersk Line, APM Terminals, the forwarding and logistics business Damco, the towing and salvage company Svitzer, and the container manufacturer Maersk Container Industry". Oil and oil related businesses, "either individually or in combination", will be separated from the group, it said.

Søren Skou, who has been acting Group CEO as well as CEO of the container carrier Maersk Line since the plan for a strategy review was put into action, will continue as CEO of the group and he will also be Chief Executive of the transport and logistics unit. On other side the group A.P. Moeller Maersk was pressured by the falling oil prices.

Rocked by low freight and oil prices, Denmark's A.P. Moller-Maersk will split into separate transport and energy divisions under a keenly anticipated revamp announced yesterday.

The company has also appointed a new group CFO, Jakob Stausholm, effective December 1.

"Both face very different underlying fundamentals and competitive environments", Chairman Michael Pram Rasmussen said in a statement.

Strong capital discipline and better utilisation of assets will be pursued.

On the strategic front, Maersk Oil will adjust to focus on fewer geographies, particularly in the North Sea, where it will strengthen its portfolio through acquisitions or mergers.

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Maersk Container Industry will collaborate with Maersk Line on technology development and efficient production planning. It will mature existing key development projects, while keeping exploration activities and expenses at a low level.

The latter will be split from the main company individually or in combination "in the form of joint-ventures, mergers or listing", within two years Maersk, which is controlled by the Maersk family and was founded in 1904 by A.P. Moller, said.

Under Andersen, the 112-year-old group sold off a number of units that weren't related to oil or shipping, including a stake in Danske Bank A/S and shares in a supermarket chain. Its plans to develop a huge offshore field in Angola also stalled as it struggled to reduce costs.

Fearnley Securities recommends buying the shares, which it predicts will reach 11,500 kroner a piece, in part based on an assumption that the new structure will generate about $600 million in cost synergies over the next three years.

Under the shake-up, Maersk said the long-standing head of Maersk Oil, Jakob Thomasen, will leave the company under a broad management reshuffle.

Kim Fejfer will step down as member of the registered management effective on 1 October 2016 and as CEO of APM Terminals effective on 1 November 2016 when he will also leave the group.

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