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