The consolidation churn claimed its latest victim, as the A.P. Moller Group and CSX (CSX)
announced today that an agreement has been reached for A.P. Moller-Maersk Line
to acquire Sea-Land Service, Inc.'s international liner business, including vessels, containers, related terminals and certain lease obligations for $800 million.
Sea-Land currently operates about 70 containership and about 200,000 containers in its international trade.
"The operation and management will be fully integrated, drawing on the best from both organizations," said Ib Kruse, partner of A.P. Moller. "Maersk-SeaLand will offer a wide range of services, unmatched in the industry, for the benefit of our customers worldwide.
"Maersk is a terrific company that will become event stronger," said John W. Snow, Chairman and CEO of CSX. "For CSX, this is a significant opportunity to enhance shareholder value and refocus our maritime resources on our well-positioned domestic container shipping business and terminal management operations. Importantly, the transaction protects national security interests under the U.S. Maritime Security Program."
The acquisition is subject to due diligence and approvals from authorities, and it is estimated that it will take nearly four months to finalize the transaction.
Maersk's corporate presence began in the U.S. in 1943, when the company was chartered in New York. Today, corporate headquarters are located in Madison, NJ. CSX acquired Sea-Land in 1986, and it operates the largest rail network in the eastern U.S. CSX generated $9.9 billion in revenue and $537 million in earnings in 1998.
A.P. Moller, headquartered in Copenhagen, has more than 40,000 employees and 320 offices in about 100 countries. Its current fleet is comprised of more than 150 ships.