Li & Fung is forming a long-term strategic partnership with AP Moller - Maersk (Maersk), an integrated logistics company working to connect and simplify its customers’ supply chains.
In addition to this strategic partnership, the Li & Fung, together with Temasek, the Singapore sovereign wealth fund, has entered into a sale and purchase agreement with Maersk, whereby Maersk agreed to acquire their jointly-owned logistics business, LF Logistics Holdings and its various entities valuing the business at US$3.6 billion on an enterprise value basis. Subject to regulatory approvals, the transaction is expected to complete in 2022.
As at Dec 22, Li & Fung holds 78.3% and Temasek holds 21.7% of the issued shares of LF Logistics. LF Logistics is a leading logistics services provider, offering both contract logistics services across Asia and freight management services globally.
The strategic partnership between the group and Maersk will enable both companies to utilise their respective resources and global networks to create a comprehensive range of end-to-end global supply chain services.
On the other hand, the disposal will further simplify the group’s business to focus on its core trading business, which has seen a strong rebound back to pre-Covid levels. After completion of the transaction, the group intends to continue to optimise its capital structure, maintaining low levels of debt.
