Hong Kong’s Li & Fung sells logistics arm to Danish shipping giant AP Moller-Maersk for US$3.6 billion

The sale of LF Logistics is expected to close in 2022 pending regulatory approval

The divestment will help Li & Fung focus on its core trading and supply chain digitalisation capabilities, executive chairman says

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A LF Logistics warehouse in Hong Kong. The firm is jointly owned by Li & Fung and Singapore sovereign wealth fund Temasek Holdings. Photo: SCMP

Published: 7:50pm, 22 Dec 2021

Hong Kong-based global trading group Li & Fung has sold its logistics arm to Danish shipping giant AP Moller-Maersk for US$3.6 billion as part of a strategic partnership to develop global supply chain services.

The sale of LF Logistics, which offers both contract logistics services across Asia and freight management services globally, is expected to close in 2022 pending regulatory approval, Li & Fung said on Wednesday.

LF Logistics is jointly owned by Li & Fung, which owns 78.3 per cent, and Singapore sovereign wealth fund Temasek Holdings, which has the rest. Founded in 1999, the logistics company employs 10,000 people and has 223 warehouses across 14 countries.

“The divestment of LF Logistics will further simplify our business to focus on our core trading and supply chain digitalisation capabilities, which have seen a strong rebound back to pre-Covid-19 levels,” said Spencer Fung, group executive chairman of Li & Fung and the great-grandson of its founder, Fung Pak-liu.

“With Covid-19 causing major supply chain disruptions, the importance of a diverse global supply chain network is more pronounced than ever, and Li & Fung is well positioned to serve our customers through our network of 50 export markets,” he added.

As part of the agreement to acquire LF Logistics, Li & Fung and Maersk have also entered into a strategic partnership to develop logistics solutions. The strategic partnership will “utilise their respective resources and global networks to create a comprehensive range of end-to-end global supply chain services”, Li & Fung said.