Deutsche Bahn Seeking Strategic Buyer for Schenker
Deutsche Bahn AG(the parent company of the DB Group) has indicated that it is open to selling its DB Schenker logistics unit, which could be valued at as much as €20 billion ($21.3 billion), to a financial or strategic investor, the company wrote in a management letter seen by Bloomberg.
The German railroad operator is weighing up whether to sell a stake or make a full divestment, according to the letter written by Schenker’s chief executive officer, Jochen Thewes, and Deutsche Bahn’s chief financial officer Levin Holle.
Deutsche Bahn said in December 2022 that it will explore a sale of DB Schenker. It may also divest its Arriva transport business. Asset sales would help the German state-owned firm slash debt, and modernize its domestic railroad operations.
Schenker is likely to attract bids from rival logistics companies. Danish transport giant DSV A/S reiterated in February 2023 that it’s ready for deals and said previously it would be interested in buying the business if the German state decides to sell. Other potential suitors in the industry could include Germany’s Deutsche Post AG and Switzerland’s Kuehne + Nagel International AG.
Carlyle Group Inc. and CVC Capital Partners have held talks about making a joint bid and buyout firms, including Advent International, Bain Capital as well as Blackstone Inc., may also be interested, Bloomberg has previously reported. The ability of private equity firms to make such a big acquisition will also depend on the state of the financing markets.
Nucleus views this as an indication of specialisation in the sector. Deutche Bahn seems to be more focussed on their core business, which is railroad operations. And looking at the potential buyers, a specialist supply chain group like DSV will seem most likely. The overall trend is towards specialisation. Which is what Nucleus has found. Most companies will inevitably, in time, outsource their supply chain activities to specialist Supply Chain as a Service providers.