[ Maersk Agreed to Purchase Sea-Land Service’s Lin... ]

Maersk Agreed to Purchase Sea-Land Service’s Liner Business

A.P. Moller-Maersk has agreed to purchase Sea-Land Service’s intern
ational container shipping business from CSX Corp. at a price of US $
800 million.
According to the foreign sources, The long-anticipated buyout is exp
ected to be finalized in about four months, following the completion o
f due diligence procedures and the obtaining of government approvals.
Under the agreement, A.P. Moller-Maersk will acquire from Sea-Land a
pproximately 70 ships operating on international routes, as well as ab
out 200,000 containers and certain port terminals.
The assets, in combination with those of Maersk Line with whom Sea-L
and has had a long-running trading partnership, will then be operated
under a new company to be named Maersk-SeaLand.
Heading Maersk-SeaLand will be an executive board comprising A.P. Mo
ller partners Ib Kruse and Knud stubkjaer and the current chief execut
ive officer of Sea-Land, John Clancey.
Clancey will also hold the post of chairman of Maersk’s U.S. subsid
iary, Maersk Inc., with Tommy Thomsen, current president of the compan
y, assuming the additional title of chief executive officer.
Maersk Inc.’s office in Madison, N.J., meanwhile, will serve as the b
ase for Maersk-SeaLand which will also maintain a presence in Sea-Land
’s headquarters in Charlotte, N.C.
Commenting on the formation of the new organization, A. P. Moller’s
Kruse said:“ The operation and management will be fully integrated d
rawing on the bwst of both organizations.”
“Maersk-SeaLand will offer a wide range of services, unmatched in the
industry, for the benefit of our customers worldwide.”
To be retained by Sea-Land following the sale of its international c
ontainer shipping assets will be the company’s terminal operation and
domestic shipping interests.
Sea-Land will continue to operate terminals in Alaska, Hawaii Guam a
nd Puerto Rico, as well as in Hong Kong, mainland China, Australia, Ru
ssia, Finland and the Dominican Republic. It will also maintain its se
rvices, operated with 16 U.S.-flag containerships, that link the conti
nental U.S. with Alaska, Hawaii, Guam and Puerto Rico.
Commenting on Sea-Land’s retention of its terminal and domestic bus
iness, John Snow, Chairman and chief executive officer of CSX, noted t
hat they were both more profitable and less capital-intensive than the
international liner shipping segment.
However, while indicating that CSX intended to further develop the t
wo sectors, Snow did not rule out their possible future sale if suitab
le offers were forthcoming.