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Sale of Ermewa, Akiem and Geodis: Sustainable strategy or cannibalization in COVID crisis?

Sale of Ermewa, Akiem and Geodis: Sustainable strategy or cannibalization in COVID crisis?
photo: Ermewa; RCG/Future asset of RCG
16 / 02 / 2021

An asset to sale: 50% shares in Akiem – already sold, up to 100% of shares in Ermewa – to be sold now, and 49% of the shares in Geodis - should be sold over two years.

A strategic action?

The half share of the locomotive subsidiary Akiem was sold to Deutsche Bank-owned investment business Deutsche Asset Management in 2016. Mr. David Zindo, president of the executive board of Ermewa Group said in those days: “This strategic action will allow us to sustain Akiem’s growth in France and Europe with a partner who shares our long-term vision for the future and the company’s operational development.”

The sale of Ermewa AS has been discussed in the market for several years – as well as internally - with the same strategic idea behind. According to the business press, the process to sell Ermewa, the second-largest wagon lessor in Europe, was expected to begin by the end of last year. The boost of the process can be exactly the opposite of a wise strategy: panic.

Under pressure from Unions

Although the French government has agreed to write off a large proportion of SNCF’s debt, the national incumbent operator has been hit hard by COVID-19, which SNCF expects to reduce its operating result by €4bn in 2020. Recently, the SNCF was openly criticized by French railway group's leading union CGT-Cheminots. The issue was the insufficient support of this public railway group from the French state.

"The company is looking for between 3 and 5 billion euros of cash to face the pandemic because the State doesn't help us", while it helps "the other companies of the sector: those of the BTP which work on the railway network", protests Laurent Brun, the general secretary of the CGT-Cheminots. "As a result, the government forces the SNCF to cannibalize itself" and "tomorrow will probably sell a large part of its social housing", he says.

Fair tender or friendly sale?

There are some voices, especially in German-speaking regions, which sound that the winner of the deal is already given: Austrian Rail Cargo Group, more precisely an investment fund owned by this group or by some of its many subsidiaries. The amount of the deal is believed to be between € 1,5 and 2,5 bn.

Ermewa Group has four subsidiaries Ermewa SA, Eurotainer and Raffles Lease, and Inveho. It owns a freight railcars fleet of 40,000 wagons and 60,000 tank containers, and wagon construction and maintenance workshops in France and Germany. The turnover in 2019was €438m, and there is a staff of 750 employees.