AP Moller-Maersk splits its shipping, energy operations
COPENHAGEN, Denmark (AP) - Danish conglomerate A.P. Moller-Maersk A/S is splitting its massive container shipping operations and its energy business into separate companies, in a major shakeup that follows years of declining oil prices and freight rates.
The Copenhagen-based group said Thursday the transport and logistics division will include its shipping, terminal and container businesses, while the energy division will handle oil drilling and production as well as the tanker business.
A.P. Moller-Maersk raised the possibility of separating its oil units from the group through joint ventures, mergers or listings. It said the main focus of the group going forward would be "delivering best in class transportation and logistics services."
The move comes just months after Soeren Skou replaced Nils Smedegaard Andersen as CEO in July. Skou will head the new transport division while Vice CEO Claus Hemmingsen will take charge of the energy division.
A.P. Moller-Maersk has seen profits and revenue plummet in recent years due to a decline in global energy markets and trade volumes. While the company did not put an estimated value on the two new companies, its overall market capitalization is 204 billion Danish kroner ($31 billion), according to financial data provider FactSet.
The core shipping business, Maersk Line, is the world's biggest of its kind and accounts for 58 percent of the company's overall revenue, which last year came in at 271 billion kroner ($41 billion). Maersk Oil accounts for 14 percent.
The company said Maersk Oil will adjust its strategy and focus in fewer areas, particularly the North Sea, where it expects to "gain scale."
Ane Maersk Mc-Kinney Uggla, chair of the group's holding company, said the changes were necessary for the group to stay "agile."
"While we are rooted in shipping and energy, we must never become static in a dynamic world," she said.
The group also appointed new heads of units including Maersk Oil, Maersk Tankers, Maersk Drilling and APM Terminals and said Jakob Sautsholm would replace Trond Westlie as group CFO.
A.P. Moller-Maersk is Denmark's biggest company, with some 89,000 employees and activities in more than 130 countries. Shares were up 1 percent at 10,010 kroner ($1,501.48) in midday trading in Copenhagen.