It has been known for a while, and now the logistics sale of the century is a done deal. Danish shipping giant DSV has formally completed the acquisition of Schenker from the Deutsche Bahn (DB) group. The German railway holding will use the proceeds to cover part of its enormous debt, while DSV just became the world’s largest logistics company.
Schenker was sold for 14,3 billion euros, which should cover a little less than half of DB’s total debt, estimated at around 32,6 billion euros at the end of 2024. Without a logistics branch, the group can now focus even more strongly on their core business – the railways, and their S3 renovation plan. On the other hand, the state-owned conglomerate is losing its most precious asset.
DB is struggling financially as the 333 million euros in operative losses for 2024 show. The cargo sector is doing even worse, with losses for 357 million euros. Without its main bread maker, the group will need to find alternative solutions to become profitable, especially since the EU dictated that DB Cargo needs to become profitable by 2026. To try and achieve this, the DB’s rail freight subsidiary is undergoing a major restructuring.
DSV takes over the world
DSV will almost double in size with the new acquisition. Schenker employs over 70,000 people and the combined new workforce will be “close to 160,000 employees”. Schenker should also bring in some money for the Danish shipping company, as it was for years the most profitable branch of DB. DSV expects a combined revenue of over 40 billion euros. “Based on preliminary estimates, annual synergies are estimated in the level of DKK 9 billion (1,2 billion euros) at (the) end of 2028”, the company said.
The sale of Schenker
DB’s logistics arm was put up for sale in December 2023 after a year of internal discussions on how to reduce the group’s debt. Not everyone in Germany welcomed the decision to sell Shenker. Trade union EVG, which has two members in DB’s Supervisory Board, voted against the sale, claiming that the relationship between Shenker and DB Cargo should have been strengthened to create a door-to-door logistics network.
During the first phase of the sale process, the parties interested in acquiring Schenker were DSV, MSC, Maersk, DHL, Bahri, a consortium of investment funds – CVC Capital Partners, Carlyle Group and the Abu Dhabi Investment Authority. Only DSV and the consortium ended up submitting a final offer. DSV was selected as the buyer in September 2024. The Danish company will get the money to pay for the acquisition through the sale of bonds and shares as well as bank debt.