Split into energy, transport for Maersk?

The new "Maersk Transport" company would include the Maersk Line (left), APM Terminals, Maersk Tankers and the Damco and Svitzer divisions, according to a report in Berlingske newspaper.
The new "Maersk Transport" company would include the Maersk Line (above), APM Terminals, Maersk Tankers and the Damco and Svitzer divisions, according to a report in Berlingske newspaper.PHOTO: REUTERS

Paper says separately listed firms likely but group says it is still mulling over options

COPENHAGEN • AP Moeller-Maersk said it is still considering several options in its strategic review after a local newspaper reported that the Danish conglomerate was exploring a two-way split into energy and transport companies.

"As our chairman previously has said, we want to evaluate all options," said Ms Louise Muenter, head of media and stakeholder relations at Maersk, in an e-mail.

"The structure of the group is one of many options being evaluated, but it is important to point out that it is one of many possibilities, as structure alone doesn't ensure growth."

Berlingske newspaper reported the most likely outcome of the review would be the formation of two separately listed companies and that a complete split-up, forming separate companies out of all of Maersk's main divisions, was off the table.

The new "Maersk Transport" company would include the Maersk Line, APM Terminals, Maersk Tankers and the Damco and Svitzer divisions, according to the newspaper.

"Maersk Energy" would include Maersk Oil, Maersk Drilling and Maersk Supply Service, Berlingske said. The newspaper cited unidentified sources that it said are close to the talks.

Jyske Bank analyst Frans Hoyer said: "The split-up could be positive for the energy divisions as they may get a higher degree of freedom and a board that's more in tune with developing their specific strategies.

"But it will also be negative for the units to lose the big support they have from the conglomerate, as they would no longer operate with the backing from the group's capital."

Maersk said it did not want to comment on the specifics of the article and that it will announce the findings of its review by the end of the third quarter.

The review's main goal "is to assess how to further strengthen the group's ability to react to market changes as well as its synergies to ensure growth in the future", Ms Muenter said.

Maersk's market valuation is about 192 billion kroner (S$39.3 billion). Chairman Michael Pram Rasmussen said on June 23 that Maersk will investigate whether some of its units would be better off "standing outside the group". Maersk shares rose 12 per cent that day, as most investors estimate the company will be worth more if the conglomerate structure is dismantled.

Mr Hoyer, who has a sell recommendation on Maersk shares, said: "If Maersk shares had been trading at a 10 to 20 per cent discount due to the conglomerate structure, that discount seems to be gone already with the market reaction we have seen since the review was announced."

He added: "But I think that everything is still open."

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A version of this article appeared in the print edition of The Straits Times on August 20, 2016, with the headline 'Split into energy, transport for Maersk?'. Print Edition | Subscribe