COPENHAGEN • Rocked by low freight and oil prices, Denmark's AP Moller-Maersk will split itself up and focus on transport and logistics, while seeking a way out of energy in a keenly anticipated revamp aimed at reviving its fortunes.
The 112-year-old conglomerate will focus on its core businesses, comprising Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry, while seeking "solutions" for its smaller energy operations.
Investors gave the news a cautious welcome, with Maersk shares rising as much as 4.2 per cent, and traded 3 per cent higher at 10,200 kroner (S$2,100) as of 9.05am in Copenhagen, bringing this year's gains to 14 per cent.
But some said the US$30 billion (S$40.6 billion) company had not gone far enough.
"It might be one of the most pain-free solutions relative to other scenarios, but they could have gone even further," Nykredit analyst Ricky Rasmussen said.
The weak market has hit the big lines which have invested heavily in "mega-ships", largely to operate the main Asia to Europe trade route. Industry sources have questioned whether there is enough work for the biggest container vessels on the high seas at the moment, putting more pressure on profits.
Chairman Michael Pram Rasmussen first revealed Maersk was assessing the merits of splitting up the group on June 23, the same day he dismissed Mr Nils Smedegaard Andersen as chief executive officer.
Under Mr Andersen, the group sold off a number of units that were not related to oil or shipping, including a stake in Danske Bank and shares in a supermarket chain.
But he had repeatedly defended the conglomerate structure, arguing that the various business units benefited from the synergies that the group structure brought with it.
"Separating our transport and logistics businesses and our oil and oil-related businesses... will enable both to focus on their respective markets. Both face very different underlying fundamentals and competitive environments," he said yesterday in a statement.
Chief executive officer Soren Skou told a news conference yesterday that the company's new transport and logistics division will aim to expand its market share every year through organic growth and acquisitions.
Maersk also said its chief financial officer, Mr Trond Westlie, will be replaced by Mr Jakob Stausholm, who is currently in charge of strategy at Maersk Line. Mr Jakob Thomasen, who had headed the oil unit, will also leave with Mr Kim Fejfer, who had run the group's APM Terminals business.