Deutsche Bahn AG has moved one step closer to selling DB Schenker, opening the door to a possible bid by DSV Panalpina, which announced last year it is interested in acquiring the business.
The German rail group said this week that it has instructed its management board to examine and prepare the case for a potential sale of up to 100% of its shares in DB Schenker.
DB Schenker employs around 76,100 staff across 1,850 locations in more than 130 countries, including the UK.
The group is the logistics arm of Deutsche Bahn and operates land, air and ocean transport services, offering logistics and global supply chain management from a single source.
Deutsche Bahn said the proposed sale would allow it to sharpen its focus on its core business and pay off some of its debt.
It added that despite DB Schenker delivering "record results", it will in the medium term "require larger financial resources and more independence to make international acquisitions with a view to retaining and enhancing its market position in the ever more competitive logistics sector", adding the sale could open up new opportunities for DB Schenker in terms of growth and development.
DSV Panalpina, which is following an agressive acquisition strategy, has already made overtures. Last year, after rumours that DB Schenker might be put up for sale, DSV Panalpina chief financial officer Jens Lund confirmed that should it be put on the market, DSV would be interested in talking to Deutsche Bahn.
However DSV and any other potential bidders may have to wait for some time. Deutsche Bahn has made clear that in light of the current economic uncertainties, it does not want to rush any possible sale of DB Schenker.
Read more
- Redhead Freight to be liquidated with assets and trade transferred to DB Schenker
- DB Schenker in record breaking order for 1,470 electric Volta Zero trucks
- DB Schenker expands Midlands presence with major warehouse deal
The group added: "A starting date for a specific divestment process is dependent on the overall situation and not yet decided. A sale shall only take place if it is of financial advantage for DB Group compared to keeping DB Schenker in the group."
DB Schenker's value is estimated at between €8bn - €10bn (£7bn - £8.7bn). In the first half of 2022, DB Schenker generated €1.2bn (£1.05bn) in operating profit, which Deutsche Bahn said was the best mid-year EBIT in the company's 150-year history.
Following its acquisition of Agility’s Global Integrated Logistics business last year, DSV Panalpina overtook DB Schenker to become the world’s third largest forwarder.
If DSV were to acquire DB Schenker it would catapult the company past DHL Global Forwarding, to become the world’s largest forwarder with revenues of around $46bn (£37.9bn), compared with DHL Global Forwarding's 2021 revenues of $28.4bn (£23.4bn).
DB Schenker has until recently operated its UK land transport operation via Redhill International, which it bought in 2015.
The deal saw DB Schenker Logistics' name replaced by the Redhead International banner within the UK as part of a 'reverse integration', with Redhead’s management team leading the enlarged business.
However, in October, following a loss making period for the company caused by the impact of Brexit and the Covid-19 pandemic, Redhead International ceased to trade and its trade and assets were transferred to parent company DB Schenker.
DB Schenker said at the time that the move would allow the business “to benefit from the strength of the DB Schenker brand in the marketplace across the UK and Europe and achieve business synergies.”
