COPENHAGEN/BERLIN, Sept 13 (Askume) – Denmark’s DSV (DSV.CO) has agreed to acquire German state-owned rail operator Deutsche Bahn’s logistics unit Schenker for 14.3 billion euros ($15.85 billion), creating the world’s biggest rail transport company.
DSV said the acquisition would be the largest ever by a Danish company and would surpass DHL Logistics and Switzerland’s Kuehne + Nagel KNIN.S in terms of volume and revenue , but would still leave the group highly fragmented.
Founded in 1976 as a small business with 10 truck drivers, DSV has grown through acquisitions , sometimes of companies much larger than itself.
Chief Executive Jens Lund told reporters: “The size of this deal is actually bigger than any deal we have done before.”
Deutsche Bahn put Schenker up for sale last year to focus on its core rail business in Germany and reduce debt.
Financial investor CVC (CVC.AS) is another bidder to acquire Schenker after Maersk and Bahri withdrew their bids .
DSV shares rose as much as 4% in early trade but fell 0.2% to 0949 amid recent reports a deal could be struck soon.
“The deal structure is broadly in line with our thinking but at a slightly better price,” Bernstein analysts said in a note.
DSV said the all-cash transaction would be funded through a combination of equity and debt financing of 4-5 billion euros.
Based on 2023 results, the combined group will have revenues of 293 billion won ($43.52 billion) and about 147,000 employees in more than 90 countries.
DSV Finance chief Michael Abe told Askume he planned to cut between 1,600 and 1,900 of Schenker’s 15,000 German staff, but stressed this would be accompanied by plans to invest 1 billion euros in Germany, which would leave the combined group with the same number of employees in five years.
German unions have warned against selling DSV because they worry it could lead to job losses. Abe said DSV would spend 10 million euros in additional compensation as part of the deal to quell union resistance.
The deal is subject to regulatory and German ministerial approval, as well as approval from Deutsche Bahn’s supervisory board, and is expected to close in the second quarter of next year.
(1 USD = 0.9022 EUR)
(1 USD = 6.7329 Danish Krone)
(This article has been modified so that the combined group is larger than not only Kuehne und Nagel, but also both DHL and Kuehne und Nagel, as noted in paragraph 2)
