Hong Kong-based supply chain management company, Li & Fung Limited, has reportedly agreed to enter a long-term strategic partnership with Danish shipping company, A.P. Moller – Maersk (Maersk). The collaboration will allow both companies to deploy their respective global networks and resources for creating an all-inclusive range of end-to-end global supply chain services.
Along with this partnership, Maersk is also set to acquire Li & Fung’s logistics business, LF Logistics Holdings Limited and its numerous entities, at a transaction value of USD 3.6 billion. The deal is anticipated to close in 2022, subject to regulatory approvals.
As highlighted by Spencer Fung, Li & Fung’s Group Executive Chairman, the company is delighted to have reached this partnership with Maersk. Fung also added that the divestment of LF Logistics will simplify Li & Fung’s business, enabling it to focus on its supply chain digitalization and core trading capabilities.
While major supply chain disruptions amid COVID have elevated the significance of a diverse global supply chain network, Li & Fung is well positioned to serve its clientele via its network of 50 export markets, explained Fung.
For the record, the partnership reportedly comes after the recent formation of LFX, which focuses on supply chain finance, investments, and digital ventures with GLP, the company’s Singaporean partner, as Li & Fung heads ahead in its journey of helping clients navigate the new digital economy.
Expressing his opinion over the intended transaction, Joseph Phi, Li & Fung Group CEO and LF Logistics CEO, stated that achieving scale is of paramount significance for LF Logistics to emerge as a global leader in the industry. Phi further underscored that Maersk is the ideal fit for the company’s customers and its people. This is because it has a substantial global presence and will deploy LF Logistics’ operational platform and talent base for building out its logistics and fulfillment offering at the global level.