China’s Container Giant CIMC Acquires Maersk’s Cold Container Manufacturing Unit for $1 Billion

China International Marine Containers Group Co. (CIMC, 000039.SZ) announced Tuesday that it has agreed to acquire Danish shipping giant A.P. Moller-Maersk A/S’s refrigerated container manufacturing unit for $1.08 billion, a deal that will give the Chinese company control of about half of the global container market.

The deal was signed Monday and is subject to anti-trust regulatory approval. CIMC, already the world’s largest maker of shipping containers, controls more than 40% of the global container market, while Maersk takes less than a 10% market share.

CIMC won the bidding among several suitors, including Chinese home appliance giant Midea Group Co., U.S. air conditioning giant Carrier Global Corp., transport temperature-control systems manufacturer Thermo King Corp., Japan’s Daikin Industries Ltd., and buyout firm Triton, Bloomberg reported, citing people with knowledge of the bidding.

CIMC will take over all of Maersk Container Industry (MCI)’s assets and employees, including its reefer factory in Qingdao as well as its R&D and test engineering facilities in Tinglev, Denmark, Maersk said in a press release posted on its website.

The divestment of MCI is part of Maersk’s business transformation, where the focus is on being an integrated container transport and logistics company, said Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands in Maersk.

Since 2017, Maersk has been divesting and selling its non-core businesses, including its oil and drilling companies.

Founded in 1991, MCI manufactures refrigerated containers and refrigeration machines for the intermodal freight industry, with all of its manufacturing facilities located in China, with about 2,300 employees. In 2020, the company delivered its most profitable result since its founding, posting operating revenue of $587 million and earnings before interest, taxes, depreciation, and amortization of $77 million.

Through the acquisition, CIMC wants to create a new growth platform in transporting refrigerated goods, CIMC Chairman and CEO Mai Boliang said.

At present, CIMC’s refrigerated container business has been limited to manufacturing the container body, and core refrigeration equipment still needs to be purchased from outside, a person at CIMC told Caixin. MCI, with its leading refrigeration technology, can help CIMC to upgrade from marine shipping insulation technology to core refrigeration technology, the person said.

Marine refrigerators require high-end manufacturing, which has been dominated by MCI, Carrier, Thermo King and Daikin, with few large newcomers in the industry in the last 15 years, the person at CIMC said.

In global transportation, medicines, vaccines, seafood, fruits and other perishable goods need to be stored and transported in chilled containers. In 2019, a total of 275 million tons of global cargo were transported in refrigerated containers, and about half was transported by sea. According to the latest projections by Drewry and McKinsey, global seaborne reefer traffic will reach 156 million tons by 2024, representing average annual expansion of 3.7%.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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