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French state railways SNCF sells Cargo Ermewa to Canadian and German investment funds of CDPQ and DWS

French state railways SNCF sells Cargo Ermewa to Canadian and German investment funds of CDPQ and DWS
photo: wagons
23 / 04 / 2021

SNCF enters exclusive negotiations with the investment funds Caisse De Dépôt Et Placement Du Québec (CDPQ) and fund managed by the DWS group (DWS), with which they negotiate the sale of Ermewa Holding SAS and its subsidiary Ermewa. According to french media the price of the transaction should reach EUR 3.3 billion.

Ermewa Group is the leading provider of leasing services for industrial railcars and tank containers. In the last year, the company achieved sales of EUR 489 million, profit before interest, taxes, depreciation, and amortization (EBITDA) of EUR 271 million.

"Ermewa has a global fleet of 42,000 wagons, of which more than 8,000 are operated in the Eastern region," said Mr. Cyrille Guyon, Regional General Manager of Eastern Europe in the media. As a result, Ermewa is one of the largest lessors of rail freight cars also in Eastern Europe.

The company employs 1,200 people and operates in a total of 80 countries, where it focuses primarily on the design, optimization, and management of strategic assets. Ermewa Group is headquartered in France. However, it has another forty international branches, where it offers its customers local expertise. The seat of the company for Eastern Europe is in Prague in Czech republic.

Following consultations with the authorities representing the employees within the SNCF and Ermewa group, the offer of the CDPQ and DWS consortium could lead to the conclusion of a sale agreement. However, the completion of this transaction will also have to be allowed by the competition authorities. Among others, the European Commission, or the Ministers of Finance, Economy and Recovery. Subsequently, the capital of the Ermewa group should be held in the same shares by CDPQ and DWS.

"I am particularly proud to open a new chapter in the history of the Ermewa Group with CDPQ and DWS. The Ermewa Group's ambition is to provide safe, efficient, and innovative equipment to its customers and to contribute to decarbonizing transport flows. The investment capacity and long ‑ term involvement of CDPQ and DWS would reinforce this ambition and allow us to envisage strong growth for the years to come,” said David Zindo-Imbault, President of Ermewa Holding.

CDPQ and DWS have significant stakes in leading French companies. These are established investors who can finance the organic growth of the companies in which they invest. They also have a long-term value-creating investment approach based on careful asset management and active shareholding.

CDPQ is an institutional investor that manages several public and transnational pension plans and insurance schemes in Qebeck. At the end of 2020, its net assets were CAD 365.5 billion. Formerly part of Deutsche Bank, the DWS Group is one of the world's leading asset managers. On the 31st of December 2020, it had assets of EUR  793 billion.

"The planned sale of Ermewa is fully in line with the SNCF group's strategy to become a world leader in sustainable mobility for passengers and goods, with a core rail business and two strategic assets, Keolis and Geodis. This operation would also accelerate the group's debt reduction and pursue the objective of maintaining its financial trajectory, while backing Ermewa with long-term partners, able to ensure the sustainability of the company's activity, which would remain a commercial partner of SNCF,” said Jean-Pierre Farandou, Chairman and CEO of SNCF.

The SNFC Group is the world leader in passenger and freight transport, including the management of the French railway network. Its annual revenue in 2020 was EUR 30 billion. SNCF employs 272,000 people and operates in 120 countries. In addition, the SNCF Group is already in cooperation with DWS due to its subsidiary Akiem, which deals with the locomotive’s rental. CDPQ is a shareholder in Eurostar, a subsidiary of SNCF. CDPQ has also recently become Alstom's largest shareholder.