Maersk buys LF Logistics in US$3.6 billion takeover

A.P. Moller – Maersk has confirmed the completion of LF Logistics acquisition in a US$3.6 billion deal.

LF Logistics, the logistics arm of Li & Fung which will be rebranded to Maersk, is a Hong Kong-based contract logistics company, with capabilities within omnichannel fulfillment services, e-commerce, and inland transport in the Asia-Pacific region.

“With the addition of LF Logistics, Maersk gains unique and best-in-class capabilities to servicing the important and fast-growing consumer markets in Asia. Furthermore, LF Logistics expertise in omnichannel fulfillment positions us well with the global e-commerce market,” commented Ditlev Blicher, regional managing director of Asia Pacific at A.P. Moller – Maersk.

Following the acquisition, Maersk will add 223 warehouses to the existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5 million m².

LF Logistics employs 10,000 people, operates an extensive Pan-Asian network, and is the supply chain partner of choice for companies looking to grow in the Asia-Pacific region, while it specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce.

As part of the transaction to acquire LF Logistics, Maersk has partnered with Hong Kong-based supply chain management company Li & Fung to develop a range of end-to-end global supply chain services with Li & Fung focusing on the upstream supply chain and Maersk focusing on the downstream supply chain.

“Maersk’s global presence provides an ideal platform for our next phase of organisational expansion and development. The unique and complementary strengths of the two companies will allow our customers to achieve sustainable competitive advantage and our people to attain their full potential,” said Joseph Phi, Group CEO of Li & Fung and CEO of LF Logistics.

The value of the transaction is US$3.6 billion (enterprise value) post-IFRS 16 lease liabilities, reflecting a pre-synergy EV/EBITDA multiple of 14.2x based on actual EBITDA for full-year 2021 for the in-country logistics business. Driven by the organic growth and commercial synergies, it is expected that revenue and EBITDA in the in-country logistics business will more than double by the end of full-year 2026, according to Maersk’s statement.

In addition, an earn-out with a total value of up to US$160 million related to future financial performance has been agreed as part of the transaction