A.P. MOLLER ACQUIRES SEA-LAND’S INTERNATIONAL SHIPPING BUSINESS

    Denmark’s A.P. Moller, the parent company of Maersk Line, and CSX Corp., the owner of Sea-Land Service Inc., have agreed a takeover of Sea-Land’s international liner business by A.P. Moller/Maersk for $800 million.
    The purchase includes Sea-Land’s vessels, containers, related container terminals, and certain lease obligations.
    Sea-Land operates approximately 70 container vessels and about 200,000 containers in its international trades. Maersk operates about 180 containerships and 300,000 containers, including those assets bought following the purchase earlier this year of Safmarine Container Lines.
    A.P. Moller and CSX said that the agreement is "a natural development of the close partnership currently in place."
    Maersk and Sea-Land have operated within a global alliance since 1996.
    The combined services will be marketed under the name of Maersk-SeaLand. Mr Ib Kruse, partner of A.P. Moller, says that "the operation and management will be fully integrated drawing on the best from both organizations."
    Maersk-SeaLand will offer a wide range of services, "unmatched in the industry," he said.
    The combined entity will be nearly twice as large as the other large containership operators, such as Evergreen, P&O Nedlloyd Container Line and China Ocean Shipping Co.
    The U.S. arm of Maersk-SeaLand will be Maersk Inc., headquartered in Madison, N.J. John Clancey, president and chief executive officer of Sea-Land, will be chairman of the U.S. arm of Maersk-SeaLand. Tommy Thomsen, president of Maersk Inc., will be chief executive officer of the U.S. entity.
    The global headquarters of Maersk-Sealand will be in Copenhagen. A.P. Moller, as the sole owner of the enlarged entity, will effectively merge the operations of Maersk and Sea-Land, creating a new category of mega-carrier with carryings of more than five million TEUs a year.
    Maersk-Sealand will have more than 20,000 port calls annually in approximately 100 countries. It will operate services throughout the world, including on the transpacific, transatlantic, Asia-Europe routes and in Central and South America, Africa, the Mideast, the Indian Subcontinent and Australia/New Zealand.
    The Maersk/Sea-Land takeover is the largest consolidation move yet in the international liner shipping industry. The enormous takeover follows a series of mergers and takeovers since 1997, including those of P&O Containers and Nedlloyd Lines, Neptune Orient Lines and APL and Hanjin Shipping and DSR-Senator.
    The transaction protects national security interests under the U.S. Maritime Security Program, CSX said. The A.P. Moller group will operate 19 U.S.-flag containerships in international commerce formerly run by Sea-Land. Through its U.S. subsidiary, Maersk Line Ltd., A.P. Moller will also operate four U.S.-flag containerships in international commerce and 22 U.S.-flag vessels under vessel management contracts with the U.S. Department of Defense.
    The acquisition is subject to due diligence and approvals from authorities. CSX and A.P. Moller expect it to take approximately four months to finalize the transaction.
    CSX Corp. said that the sale will enhance shareholder value and refocus the group’s maritime resources on domestic container shipping business and terminal management operations. CSX’s residual involvement in shipping will be through its domestic shipping operations and the operation of container terminals.
    Sea-Land’s domestic shipping services to and from Puerto Rico, Hawaii, Guam and Alaska and certain terminal operating activities are not included in the sale to A.P. Moller.