World's Biggest Shipping Company Pours Billions Into Market Rout

  • Maersk says more deals may come as pricing remains attractive
  • APM Terminals CEO says company has clout to buy amid downturn

The world’s biggest shipping company is taking advantage of low industry prices to build its business across units.

A.P. Moeller-Maersk A/S unveiled its latest venture on Thursday, when its APM Terminals unit said it will invest 758 million euros ($859 million) in a Moroccan port facility. That follows the closing earlier this month of the unit’s $1 billion acquisition of a Spanish rival, and an almost $1 billion deal in Mexico.

“Global trade is down at the moment, but the agreement shows the Maersk group’s strengths, that we can make long-term investments even when freight rates are challenged,” Kim Fejfer, the chief executive officer of APM Terminals, said in a phone interview. The Tangier concession will run 30 years, he said.

Maersk is going ahead with acquisitions even as its own business suffers from what analysts have described as a perfect storm, with plunging freight rates hitting its shipping business and low oil prices squeezing its exploration and drilling operations. The company in February reported an 84 percent slump in 2015 profit and wrote down the value of its oil assets by $2.6 billion.

But the group still generated $8 billion in cash flow last year and CEO Nils Smedegaard Andersen has underscored his intention to look for takeover opportunities.

Maersk Drilling CEO Claus Hemmingsen said earlier this month his unit may also be able to take advantage of the group’s financial strength and find cheap assets amid the market downturn.

The Tangier Terminal will have Maersk Line, the group’s container shipping unit, as its main customer, Fejfer said. APM Terminals, which also earlier this month said its $900 million Mexican port is about to open, “will have a very busy 2016,” he said.

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