It appears that DB Schenker is primed to acquire Danish logistics powerhouse, DSV.
Seems like the fight for acquiring Schenker, Deutsche Bahn's major earnings booster, has seemingly concluded. Reports suggest that the deal isn't likely to favor Verdi's preferred bidder. There are apprehensions about potential job losses.
It's being whispered within circles that the competition to purchase Deutsche Bahn's Schenker logistics division is done. The renowned international logistics firm, Schenker, is rumored to be heading to Denmark's DSV for approximately 14 billion euros, as per information obtained from governing bodies and corporate insiders communicating with Reuters news agency. It's projected that a preliminary contract will be inked imminently, possibly on a Friday. However, the deal is pending approval from the supervisory panels. The railway's supervisory panel has scheduled an extraordinary meeting for this purpose.
Should the deal go through, DSV would outshine the remaining contender, financial investor CVC. Deutsche Bahn's press representative declined to comment on these reports. Meanwhile, DSV chose not to comment on industry speculations.
Since last week, DSV has been the favorite to grab Schenker. Both parties presented offers of around 14 billion euros for 100% ownership, with DSV's offer reportedly slightly higher. Last Friday, the committee responsible for handling Schenker's sale sat down for discussion. According to sources, there was a bias towards DSV following the meeting. The committee consists of ministerial secretaries from the coalition government.
Verdi's Worries
The Verdi union, representing Schenker employees in Germany, has voiced concerns about DSV. They believe that a higher number of jobs could be at risk if Schenker falls under Danish ownership, opposed to CVC's control. They anticipate increased dual locations under DSV, and have seen significant workforce reductions in preceding acquisitions.
Sources revealed that DSV countered with its own argument: The expected job loss would be limited to a maximum of 1,000 in the short term, while the merged organizations would employ more people in the long run.
The railway aims to offload Schenker in an effort to concentrate on its struggling domestic business in Germany and lower its over 30 billion euros debt. However, Schenker has long been the largest contributor to the railway's income.
Given the ongoing negotiations, if the German Railways decide to sell Schenker to DSV, this could potentially lead to concerns among Verdi union members, as they fear an increase in job losses compared to if Schenker were under CVC's control. Additionally, German Railways might find itself in a stronger financial position if the sale of Schenker helps them reduce their extensive debt and concentrate on their domestic business.
