Danish logistics and forwarding giant DSV and a consortium led by private equity fund CVC Capital Partners have submitted their final offers to acquire DB Schenker with the outcome likely to be decided on the provision made in the bids to safeguard jobs.

German newspaper Der Spiegel recently reported that labour union Ver.di is campaigning heavily in favour of CVC’s bid. In an internal document, it estimates that 5,300 jobs could be axed at the company should DSV take the helm.

DB Schenker employs over 76,000 staff in more than 130 countries. “The threat of job losses in the event of a takeover of DSV is immense,” the document reads, a copy of which was also sent to Deutsche Bahn’s supervisory board.

“As CVC does not operate a logistics business, no such imminent job losses are to be expected here,” the document added. In fact, CVC already has a strong logistics presence, owning Denmark’s fast-growing Scan Global Logistics – a direct competitor of DB Schenker. The question here is whether CVC plans to forge a merger between SGL and Schenker or perhaps sell off the former if its offer wins.

Earlier this year, business consultant and analyst Bernstein described DSV as“the logical buyer” of DB Schenker, having “the highest synergy potential and the lowest execution risk and that the company would be “worth the most to [DSV], and they should be able to pay the most for it”. However, it underlined the importance of the ‘jobs factor’ and that German politicians may resist a sale to DSV as it “typically sheds 45 per cent of the increase in headcount in the 18 months post-deal.”

DSV smoothens out its offer

Meanwhile, according to Reuters, DSV has sweetened its bid by indicating that it wants to invest around 1 billion euros in DB Schenker within three to five years to make the business more profitable, quoting sources close to the negotiations. In addition, no individual parts of DB Schenker would be sold after an acquisition, they said.

DSV and DB Schenker would employ more people in Germany in the medium term than currently. DSV has assured that employment guarantees would be in place for two years after the expected completion of the sale in 2025, the sources added. Responding to the media report, a spokesperson for DSV said: “We don’t comment on rumours in the market or M&A in general.”