NOL spins off APL Logistics

Speculation first reported in Logistics Management that APL Logistics was up for sale has been confirmed. In a statement issued yesterday, Neptune Orient Lines (NOL) indicated it is spinning off the third-party arm for $1.2 billion to Japan’s Kintetsu World Express (KWE). The deal is subject to NOL shareholder and regulatory approval.

Kintetsu World Express’ (KWE) largest operations within its global network are in Japan and China, with over 100 offices located in each of those countries. 

Armstrong and Associates, a prominent consultancy, currently ranks the company at the top tier level.

“Over 53 percent of its business is air freight based.  Ocean freight and logistics account for about 35 percent,” says Richard Armstrong, the consultancy’s chairman. “Japan generates 40 percent of the business, the rest of Asia and Oceania generate 39 percent, North America 12 percent, Europe and other regions account for the rest.  Its primary verticals are automotive, high-tech, and healthcare. “

Armstrong added that KWE has a host of strategic joint ventures and affiliated companies.

The two companies have entered into a sale and purchase agreement that will see NOL becoming a pure container line under the APL brand.

“This is a strategic move that will allow us to focus on improving our liner shipping business, while at the same time enabling APL Logistics to grow. The transaction will also strengthen our balance sheet and unlock value for our shareholders,” said Ng Yat Chung, president and CEO of NOL.

KWE plans to keep APL Logistics headquarters in Singapore and run the company as a separate unit.