Danish shipping-and-oil giant A.P. Møller-Mærsk A/S said Thursday it would split its operations into two separate divisions focused on transport and energy as it battles one of the worst shipping down-cycles and a historic oil-price rout.
Maersk Line, the company's biggest unit and the world's largest container operator by capacity, will oversee a new transport and logistics division, while the group's oil interests will be consolidated into an energy division, in what is the biggest shake-up in the group's 100-year plus history.
"The industries in which we are operating are very different, and both face very different underlying fundamentals and competitive environments," Chairman Michael Pram Rasmussen said in a news release. "Separating our transport and logistics businesses and our oil and oil related businesses into two independent divisions will enable both to focus on their respective markets."
Nearly two years of low crude-oil prices have hit Maersk's energy unit hard. Meanwhile, the container-shipping industry has seen freight rates tumble amid a capacity glut, prompting price wars between operators that have pushed freight rates to levels barely covering fuel costs.
The split is intended to give the Maersk Line more flexibility to grow through acquisitions in what is expected to be an acceleration of industry consolidation in coming months.
"I expect to see consolidation in the industry because many carriers haven't made money for years and that can't be can't be sustainable in the long run," Maersk group chief executive Søren Skou told The Wall Street Journal. "We will make sure we have strong capital and better utilization of assets so we have the fire power to do big things if opportunities come up."
Mr. Skou said acquisitions will be "the preferred option" of Maersk investment going forward. It was the first time in years that a senior Maersk executive has been so specific in discussing takeovers.
In August, South Korea's Hanjin Shipping Co. , the world's seventh-biggest operator, filed for bankruptcy protection. Many expect it to be liquidated by year-end.
Shipping executives say the Japanese container trio of Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines and Nippon Yusen Kaisha Ltd. along with Hong Kong-based Orient Overseas Container Line Ltd. and Taiwan's Yang Ming Marine Transport Corp. will likely be in the crosshairs of bigger players.
Kawasaki Kisen Kaisha dismissed earlier Thursday Chinese media reports that it would file for bankruptcy over the next two weeks.
"It's very clear that Maersk wants to grow," said Lars Jensen, chief executive of Copenhagen-based SeaIntelligence Consulting. "Instead of the units fighting each other for capital, the split-up will allow the separate businesses to focus on acquisitions. I expect Maersk Line to be more predatory over the next couple of years."
Mr. Jensen said an estimated 30% overcapacity that has led to freight rates barely covering fuel costs has left a slew of smaller container operators like Hanjin exposed to takeovers by bigger peers like Maersk.
"The pressure on smaller lines is tremendous," Mr. Jensen said. "They have been losing money for years and at some point you will either go bankrupt or be swallowed up by a bigger fish."
Mr. Jensen expects the world's 20 biggest container operators to lose between $ 8 billion and $ 10 billion this year. Most were deeply in the red in the second quarter. Maersk Line posted a $ 139 million net loss, down 72% from a $ 499 million profit a year earlier in the period.
Maersk Line makes up more than 50% of the entire group's revenue.
Maersk's Mr. Skou said he expects freight rates to remain below sustainable levels for the foreseeable future.
"I am quite negative on freight rates, I don't think they will go up, probably more likely to go down on balance," he said. "There won't be a market where suddenly from one day to the other we will all be saved by higher freight rates. It's going to take time and how long—it's too difficult to predict."
Freight rates in the benchmark Asia to Europe trade route have averaged a monthly $ 573 per container over the past 13 months. Shipping executives say anything below $ 1,400 is unsustainable in the long run.
Maersk stunned investors in June when it fired Chief Executive Nils Andersen and asked Mr. Skou to look into breaking up the group and possibly selling or listing some of its units.
In its reorganization, Maersk's Transport & Logistics division will consist of Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry businesses. Maersk Line has been tasked with growing market share, both organically and through acquisitions.
The four businesses within the Energy unit—Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers—will either remain part of the Maersk group or be separated in the form of joint ventures, mergers or a listing.
A decision will be made within two years, but Mr. Skou said the company said it isn't looking to spinoff all four businesses.
On the strategic front, Maersk Oil will adjust to focus on fewer geographies, particularly in the North Sea, where it will strengthen its portfolio through acquisitions or mergers. Exploration activities and expenses will be kept at a low level, it added.
Maersk's shares closed 3.4% higher Thursday in Copenhagen.
Mr. Skou will remain CEO of the group and will also head the transport & logistics division, while Claus V. Hemmingsen has been named vice CEO and will head the energy division. Chief Financial Officer Trond Westlie will step down, to be succeeded by Jakob Stausholm, who currently heads up Maersk Oil.
Maersk is controlled through a foundation by its founding family, which built the business from a steamship company started in 1904.
—Kjetil Malkenes Hovland contributed to this article.
Write to Costas Paris at costas.paris@wsj.com and Dominic Chopping at dominic.chopping@wsj.com
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