A.P. Moller – Maersk Completes Acquisition of LF Logistics

Today, A.P. Moller – Maersk (Maersk) announces the completion of its acquisition of LF Logistics, a Hong Kong-based contract logistics company with top-tier capabilities in omnichannel fulfillment services, e-commerce, and land transportation in the Asia-Pacific region. As a consequence, LF Logistics will be renamed Maersk.

(Kopenhagen) “I am very pleased to welcome LF Logistics to Maersk. In the past, Maersk in Asia has primarily focused on sea transportation from Asia and related logistics services. Transporting and managing goods produced in Asia for consumer markets in the West and beyond. With the addition of LF Logistics, Maersk gains unique and top-tier capabilities to serve the important and rapidly growing consumer markets in Asia. Furthermore, LF Logistics’ expertise in omnichannel fulfillment positions us well in the global e-commerce market,” said Ditlev Blicher, Regional Managing Director for the Asia-Pacific region at A.P. Moller – Maersk.

After the acquisition, Maersk will expand its existing portfolio by 223 warehouses*, increasing the total number of facilities to 549 worldwide, covering a total area of 9.5 million square meters.

Extensive Pan-Asian Network

LF Logistics employs 10,000 people, operates an extensive pan-Asian network, and is the preferred supply chain partner for companies looking to grow in the Asia-Pacific region. LF Logistics specializes in B2B and B2C distribution solutions in retail, wholesale, and e-commerce, boasting a track record of strong customer relationships and operational excellence, providing a solid foundation for Maersk to expand in the Asia-Pacific region and globally.

“LF Logistics has a commendable track record of profitable growth in the region for over two decades. Maersk’s global presence offers an ideal platform for our next phase of organizational expansion and development. The unique and complementary strengths of both companies will enable our customers to achieve sustainable competitive advantages and allow our employees to reach their full potential. We look forward to a seamless transition for our colleagues and customers,” said Joseph Phi, Group CEO of Li & Fung and CEO of LF Logistics.

Fits into the Strategy

LF Logistics aligns with Maersk’s strategic intent to continuously support customer needs in the supply chain as a trusted partner with control over deliveries, thanks to its extensive presence in the Asia-Pacific region and industry-leading fulfillment capabilities.

The transaction value amounts to USD 3.6 billion (enterprise value) from lease liabilities under IFRS 16, corresponding to an EV/EBITDA multiple before synergies of 14.2x, based on the actual EBITDA for the full year 2021 for the domestic logistics business. Driven by organic growth and commercial synergies, revenue and EBITDA in the domestic logistics business are expected to more than double by the end of the full year 2026.

Earn-Out Based on Future Financial Performance

Additionally, an earn-out with a total value of up to USD 160 million regarding future financial performance has been agreed upon as part of the transaction.

As part of the acquisition of LF Logistics, Maersk has entered into a strategic partnership with Li & Fung to develop a comprehensive offering of end-to-end services for the global supply chain, with Li & Fung focusing on the upstream supply chain and Maersk on the downstream supply chain. Furthermore, it is expected that Li & Fung’s parent company will retain and further develop the spun-off GFM business after separate regulatory approvals.

*LF Logistics had 223 warehouses at the end of 2021.

Photo: © LF Logistics