‘DSV wins race to buy DB Schenker’
DSV has won the battle for DB Schenker. The Danish logistics company has come out on top over equity firm CVC, and will be paying around 14 billion euros for the Deutsche Bahn (DB) subsidiary. The deal still needs to be approved by DB’s supervisory board.
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Only CVC and DSV remained as contenders for the acquisition of DB Schenker, after Maersk and Saudi shipping company Bahri dropped out of the race earlier this summer. Now, it is Danish DSV that is reportedly coming out on top. It would propel the company forwards to become the largest freight forwarder in the world.
The finalisation of the race was reported by both Reuters and Bloomberg, citing sources in the government and DB. The supervisory board of DB will convene in an extraordinary meeting in the coming days to approve the deal, writes Reuters.
Labour union favoured CVC
Despite DSV’s reported victory, German publication Der Spiegel wrote that labour union Ver.di was campaigning heavily in favour of CVC’s bid. The union expects DSV to heavily cut jobs after the takeover, as it typically sheds about 45 per cent of jobs in the 18 months post-deal.
On the contrary, business consultant and analyst Bernstein described DSV as“the logical buyer” of DB Schenker earlier this year, with it 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”.
Last-minute battle for DB Schenker
In the lead-up to the finalisation of the deal, both DSV and CVC sweetened their bids in an attempt to win over DB. The Danish logistics company indicated that it wants to invest around 1 billion euros in DB Schenker in the years following the takeover to boost profitability.
CVC, for its part, offered an additional payment of at least 1 billion euros to Deutsche Bahn in case of a future initial public offering (IPO) exit. That offer would have stood if the German government went along with one of two variants of CVC’s bid, in which the state would remain a minority stakeholder in DB Schenker, Reuters wrote.
