The World Welcomes a New Transport Giant: Denmark’s DSV Wins Bid to Acquire DB Schenker for USD 14 Billion

The DB board has approved the sale of DB Schenker. Danish company DSV has reportedly won the bid to acquire DB Schenker, in a transaction valued at USD 14 billion, creating the world’s largest transport company.

According to Reuters, DSV outbid a consortium led by CVC, despite both offers being equal in price. Deutsche Bahn (DB) initially shortlisted four finalists from twenty interested parties and invited them to submit final bids.

DSV announced plans to further develop DB Schenker, with an investment of EUR 1 billion over the next three to five years. The deal still requires approval from Deutsche Bahn’s supervisory board, which includes representatives from the federal government, parliament, and labor unions. Union representatives favored the second-place consortium led by CVC, due to concerns over potential significant staff reductions.

Deutsche Bahn is under considerable financial pressure as the European Commission has indicated opposition to subsidies from the parent company benefiting the loss-making DB Cargo. It remains unclear how DSV intends to finance the transaction, which is approximately EUR 14 billion. After the merger with DB Schenker, DSV would become the market leader in both rail freight and air cargo.

Last year, DSV reported revenues of USD 22.3 billion. At the same time, DB Schenker posted USD 22.1 billion, with DHL Global Forwarding and Supply Chain leading the market at USD 33.9 billion, according to the consulting firm Armstrong and Associates. DSV has proliferated over the past decade, driven by acquisitions of companies such as Panalpina, UTi, and Agility Global Integrated Logistics.

From a European legal perspective, the process of assessing the impact on competition will soon begin, likely necessitating the divestiture of certain parts of DB Schenker and DSV to third parties.

Source: DSV; Reuters