The sale of the rail logistics subsidiary Schenker has been decided. The federal government and the supervisory board approved the billion-dollar deal. The employee side still believes the deal is a mistake.
The supervisory board of the federally owned Deutsche Bahn (DB) has approved the sale of the logistics subsidiary DB Schenker to the Danish competitor DSV. In an extraordinary meeting, a majority of the control committee voted in favor of the deal with a volume of around 14.3 billion euros, as Deutsche Bahn announced.
“At the same time, the federal government today granted the approval required for the transaction in accordance with the Federal Budget Code (BHO),” it said. The deal is expected to be completed over the next year.
Not a unanimous vote
“The sale of DB Schenker is an important milestone for DB in order to concentrate consistently on the renovation of the domestic rail infrastructure and the operation of climate-friendly passenger and freight transport in Germany and Europe,” said the chairman of the supervisory board, Werner Gatzer.
However, the decision was not unanimous in the committee. Nine of the ten employee representatives voted against the sale, according to supervisory board circles. There was also one abstention.
The Railway and Transport Union (EVG) in particular had criticized the planned transaction in recent days. “We consider the decision to sell Schenker to be a serious strategic mistake,” said EVG boss Martin Burkert. “In order to generate revenue in the short term, income should be foregone in the long term. That is not a wise corporate policy.” However, the employees were unable to stop the sale.
Bahn is parting ways with a profit maker
The ailing DB Group will thus part with one of the few well-performing business areas in-house. In 2023, the logistics giant Schenker made a profit of 1.8 billion euros and brought the railway out of the loss zone, at least operationally. The proceeds from the sale are to be used entirely to reduce the mountain of debt at the railway, which amounted to around 33 billion euros in the first half of the year.
“We have formulated clear goals to structurally renovate the railway in the areas of infrastructure, operations and profitability and to focus on the core business,” said railway boss Richard Lutz. “The proceeds from the sale will significantly reduce DB’s debt and make an important contribution to the financial stability of the DB Group.”
Transport Minister Volker Wissing (FDP) emphasized that the sale would increase the pressure on the railway to compensate for the future lack of income. The sales proceeds make an important contribution to this. “But the core must be the rapid and thorough implementation of the group restructuring strategy.”
World market share after merger at up to seven percent
Including expected interest income until the sale is completed, the business is worth 14.8 billion euros. It is a record deal for both companies. Due to the highly fragmented logistics market, Schenker and DSV only have a global market share of up to seven percent even after the merger, according to previous information.
In addition to the Danes, private equity investor CVC Capital Partners also made an offer for Schenker, but ultimately did not get the chance. “Like any responsible owner, DB is selling its logistics subsidiary DB Schenker at the end of a clearly structured sales process to the party that made the highest and most attractive offer, and that was DSV,” the railway announced a few days ago.
Concentration on the core business
With the Schenker sale, the federally owned company is concentrating more on its core rail business. Schenker was a thorn in the side of many rail critics because, in their view, the company, with its high proportion of road, air and sea freight, did not fit in.
Source: Stern
