Danish shipping giant Maersk has agreed to buy Swedish customs broker KGH Services in its bid to “take ownership of the entire shipment” by delivering an end-to-end logistics service.
The acquisition from KGH’s private equity owner, Bridgepoint Development Capital, will cost around $280m and is the latest step in its “digital transformation journey”, Maersk said in a statement.
Maersk currently handles around one in five containers shipped by sea worldwide and ships goods for major international brands including Walmart and Nike. Following the acquisition of KGH, it will increase its inland customs presence from 15 to 22 European countries.
The move will allow the Danish company to “take ownership of the entire shipment and move it faster”, Maersk’s ocean & logistics chief executive, Vincent Clerc, said.
Currently firms use two or three different suppliers for different stages of a shipment, from booking cargo to customs clearance to final delivery.
Maersk’s aim is to supply all these services to customers as a one-stop-shop.
“There are no end-to-end solutions without customs clearance,” said Clerc.
“With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers´ end-to-end supply chain needs.”
2016: Maersk sells its oil and gas business to focus on its container and logistics services
2019: Buys California-based warehousing and distribution firm Performance Team
February 2020: Purchases US customs broker Vandegrift, a harbinger of the KGH deal in Europe.
July 2020: Buys KGH Customs Services
Who are KGH?
According to Reuters, KGH Customs Services has 775 employees and had revenue last year of $95m.
In recent years it has developed a strong consulting line and has partnered with the Institute of Export & International Trade in delivering the HMRC-backed UK Customs Academy.
The UK Customs Academy was set up to prepare the British customs intermediary sector and business community for changes to UK-EU trade post-Brexit.
Marco Forgione, director general of the IOE&IT, said he “looks forward to continuing to work with KGH on building upon the success of the Academy”, saying it was “vital” that businesses gain the “necessary skills” for new trade rules after the transition.
KGH’s CEO, Lars Börjesson, said joining forces with Maersk will allow KGH to “play a key role in a combined entity providing a range of different services within the transport and logistics industry”.
Loadstar reports that the acquisition is subject to customary regulatory approvals, and Maersk and KGH will continue to operate as two separate entities in the meantime.