UPDATE 2-Maersk to sell retail stakes to focus on shipping, oil
* To sell 49 percent of Denmark's largest retailer
* Two divestments will generate 17 bln DKK cash
* Proceeds will be initially used to reduce debt - CEO
* Divestments part of strategy to focus on core business (Add details, background)
By Teis Jensen and Ole Mikkelsen
COPENHAGEN, Jan 7 (Reuters) - A.P. Moller-Maersk has agreed to sell substantial stakes in Denmark's largest retailer and a department store chain, as the shipping and oil conglomerate slims down to boost performance.
Maersk said on Tuesday it was selling 48.7 percent of Dansk Supermarked, which owns 1,200 supermarkets in Scandinavia, Germany and Poland, and 18.7 percent of department store chain F. Salling for about 17 billion Danish crowns ($3.1 bln).
Privately held Salling Companies, which co-founded Dansk Supermarked with Maersk fifty years ago, is buying the shares.
Maersk, Denmark's largest company by revenue, is selling the stakes as part of a five-year plan to shrink its sprawling business empire to five core areas and increase return on invested capital (ROIC), a key performance measure.
The group, which includes core business Maersk Line - the world's largest container shipping company by revenue - has about 1,000 subsidiaries around the world.
Chief Executive Nils Smedegaard Andersen declined to comment on Maersk's long-term plans for cash generated by the share sales.
"We don't have any acquisition plans. This is not part of a financing scheme. We have a very strong balance sheet," he said.
In the short term the company will reduce its net debt, which was $12.1 billion at the end of September, he said.
Sydbank analyst Jacob Pedersen said Maersk's shareholders might get an extraordinary dividend at the beginning of 2015.
Shares in Maersk were up 3.7 percent compared with a 1.0 percent rise in the Danish benchmark index at 1550 GMT on Tuesday.
Tuesday's deal values Dansk Supermarked at an enterprise value of 41 billion crowns, or 14.5 times earnings before interest, taxes, depreciation and amortization (EBITDA), Maersk said.
Pedersen said the price for Dansk Supermarked was more than he had expected and put the company on a higher valuation than comparable European retailers. Pedersen said the premium was partly due to the real estate that Dansk Supermarked owns.
The deal includes an option for Maersk to sell its remaining 19 percent stake in both retailers after five years.
Chief Executive Nils Smedegaard Andersen's streamlining strategy was presented to investors in October 2012, but was initiated more than a year earlier, the company said.
ROIC was 8.2 percent in the first nine months of 2013 - about two years into the plan - compared with the 10 percent target.
Dansk Supermarked was labelled a "strategic investment" alongside the group's 22.8 percent stake in Denmark's largest lender, Danske Bank in 2012 and the agreement on Tuesday to sell it sparked speculation that Danske could also be up for sale.
However, Andersen dismissed that suggestion.
Tuesday's deal follows a number of other divestments.
On Sunday, Maersk agreed to sell 15 very large crude carriers to Belgium's Euronav for $980 million and is in the process of selling its 31.3 percent stake in Danish ferry shipping company DFDS. That deal is expected to make gross proceeds of 1.64 billion Danish crowns.
Alm. Brand Markets analyst Jesper Christensen said many of Maersk's smaller businesses could be sold and the next divestment could be its 10 drilling barges on Lake Maracaibo in Venezuela.
He said Hoegh Autoliners, which ships new cars and which Maersk described as an asset "managed for value", could also be a sale candidate.
The group's five core business divisions are Maersk Line, port operator APM Terminals, Maersk Oil, Maersk Drilling and its unit Services & Other Shipping, which consists of its oil tankers, tugboats and supply, logistics and salvage services. (Additional reporting by Stine Jacobsen,; Editing by Erica Billingham)