DSV Reported to Be in Advanced Talks to Buy DB Schenker
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DSV A/S is in advanced talks to acquire Deutsche Bahn AG’s logistics unit DB Schenker, people with knowledge of the matter said, in a 14 billion euro ($15.4 billion) deal that could rank as one of the largest in the transport industry.
The Danish group has won the support of Deutsche Bahn’s management board over rival bidder CVC Capital Partners, the people said. DSV is now finalizing terms of a deal to buy DB Schenker and could sign an agreement as soon as this week, according to the people, who asked not to be identified because the information is private.
Any deal would still need approval from state-owned Deutsche Bahn’s supervisory board, the people said. The 20-person committee is equally made up of shareholder and labor representatives.
DSV A/S (North America) ranks No. 10 on the Transport Topics Top 100 list of the largest logistics companies in North America. It ranks No. 14 on the TT Top 50 list of the largest global freight carriers.
DB Schenker ranks No. 25 on the TT Top 100 list of the largest logistics companies in North America. Deutsche Bahn ranks No. 15 on the global freight carriers TT50.
The powerful Verdi labor union has come out opposed to the deal, and although it doesn’t have a seat on the supervisory board, it could try to exert influence on the labor representatives. There’s also a possibility that German politicians could try to scupper a deal.
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CVC sent letters Sept. 9 to Deutsche Bahn’s management and supervisory boards, pushing it to give full consideration to an alternative offer that it says is superior. The proposal would allow Deutsche Bahn to reinvest 1 billion euros to keep a stake of up to 24.9%, which CVC says would bring guaranteed proceeds of 2 billion to €2.5 billion euros.
DSV itself last week committed to limit layoffs to between 1,600 and 1,900 roles at Schenker’s German headquarters, according to a memo seen by Bloomberg News. They also said they won’t reduce blue-collar jobs. Schenker itself is cutting around 800 to 900 jobs in Germany by 2028 under its own restructuring program. That number would reduce DSV’s plans, people familiar with the matter have said.
Representatives for CVC, Deutsche Bahn and DSV declined to comment.
