* 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 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
"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
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
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
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
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