A. P. Moller – Maersk Group sells Norfolkline to DFDS

A. P. Moller – Maersk Group sells Norfolkline to DFDS
December 23 2009, Maersk
By:Rondo Docille
The A.P. Moller – Maersk Group and DFDS have today agreed that DFDS will acquire 100 percent of the shares in ferry and logistics company Norfolkline.

The total value of the deal is approximately EUR 346 million (DKK 2,575 million), which includes the A.P. Moller – Maersk Group obtaining 28.8% of the shareholding in DFDS. In addition, the A.P. Moller – Maersk Group will buy shares in DFDS from Lauritzen Fonden, bringing the Group’s total shareholding in DFDS to approximately 31%.

The deal excludes two of Norfolkline’s vessels, which the A.P. Moller – Maersk Group has agreed to sell to another buyer.

There has been a need for consolidation in the European ferry industry and the combination of Norfolkline and DFDS will create Northern Europe’s leading ferry operator, spanning from Russia to Ireland, with 6,200 employees and a fleet of 75 vessels prior to the sale of the two Norfolkline vessels.

Being a large shareholder in DFDS will create value for the A.P. Moller – Maersk Group and is in line with the Group’s strategy to focus on core activities.

The estimated 2009 pro forma financials of DFDS and Norfolkline show revenues of EUR 1,480 million (DKK 11,000 million) and EBITDA of EUR 139 million (DKK 1,035 million). “DFDS and Norfolkline are a very good match and we are very pleased with this transaction, says Søren Skou, partner and member of the A.P. Moller – Maersk Group’s Executive Board.

“We have identified both operational and commercial synergies, which will create value for the owners, and we look forward to becoming a major shareholder in DFDS,” says Søren Skou.

The deal will enable DFDS to secure volumes through a much wider logistics network and strategic port access, while maintaining a constant focus on quality and efficiency. The key focus areas for the new company during the initial integration phase will be to generate revenue growth through wider market coverage, to consolidate ro-ro shipping and port terminal operations on the North Sea and to improve capacity utilisation of the route network.

In the long term, the synergy potential will come from three main drivers: Revenues and earnings growth, operating synergies and optimisation of vessel deployment.

The A.P. Moller – Maersk Group has under the shareholders’ agreement the right to nominate one member to the DFDS Board of Directors. The A.P. Moller – Maersk Group intends to nominate Søren Skou. As part of the shareholders' agreement, the parties have also agreed to a lock-up period of 24 months.