Bonds, shares and bank debt: this is how DSV plans to pay for DB Schenker

Danish shipping giant DSV will raise funds for the purchase of DB Schenker through a large bond sale. The company is expected to issue four or five bonds before the end of the year, with the deal to be finalised in the second quarter of 2025.

Other than bonds, DSV is financing the initiative through shares and bank debt to reach the necessary 14.3 billion euros. At the beginning of October, the Danish company sold five billion euros worth of shares to various banks and funds. The goal is to have the majority of the money coming from bonds and bank debt, DSV’s CFO Michael Ebbe said in an interview with Bloomberg.

The sale of DB Schenker

The official decision to sell came in December 2023, and DSV was selected as the buyer about a month ago, beating an offer of a consortium led by CVC Capital Partners. Selling DB Schenker, the logistics arm of the German state-owned railway holding Deutsche Bahn (DB) was a necessary measure for the mother company to partly cover its outstanding debts, set at 34 billion euros.

However, not everyone in Germany agrees on how the money from the DB Schenker sale should be used. Trade union EVG is pushing to deploy the funds to cover DB’s debts, while rail freight association Die Güterbahnen claims that the money should be used to upgrade the German rail infrastructure.