Danish shipping and oil group
A. P. Moller-Maersk could be split into separate companies, its chairman said on Thursday 23rd June 2016.
Board chairman
Michael Pram Rasmussen, speaking after naming
Soren Skou as the new CEO of the global conglomerate, told Danish media outlet Finans "The question is whether we should be a large group, or whether we should be a number of independent companies."
Maersk has five core businesses which include Maersk Line, APM Terminals, Maersk Oil, Maersk Drilling and APM Shipping Services. The group has a presence in 130 countries and employs nearly 90,000 people.
According to Michael Pram Rasmussen, Skou, a Maersk veteran who has been with the company since 1983 and head of Maersk Line since 2012, has "solid business understanding with extensive knowledge of the group's various business areas and has successfully restructured the companies he has led so far".
Maersk shares rose more than 10 percent following the announcement with investors betting on a break-up and seeing Skou's appointment as a sign of a more profound restructuring.
The board of directors has told Skou to "investigate the strategic and structural options to further increase agility and synergies".
With container shipping suffering from low freight rates and the oil business dealing with around a 60 percent fall in oil prices, Maersk is battling volatile earnings on two fronts.
"It is reasonable to have different business areas within the company as long as you are able to deliver an attractive return," said
Otto Friedrichsen, an equity strategist at Danish asset manager Formuepleje. "But the challenge is if a broad portfolio of business areas steals focus from the overall."
Maersk Line, with a shipping business of more than 600 container vessels, is the world's leading container shipping carrier - and the shipowner that buys the most marine fuel - but it is fighting to maintain its position as new challengers try to grab a bigger share of a depressed market.
The oil division, which produced 312,000 barrels per day of oil equivalent last year, has also been hit by weak energy markets.
The management change comes just days after the grandson of Maersk Mc-Kinney Moller, the man who transformed the shipping company into an international conglomerate, was appointed chief executive of the family-owned holding company behind the group.
The management is expected to update investors on its strategy at a Capital Markets Day on September 22nd 2016.
