Business, Freight News, Logistics

Union Opposes DB Schenker Sale to DSV

[ October 4, 2024   //   Gary G Burrows ]

A Deutsche Bahn AG labor union will try to block the agreed €14.3 billion (US$16 billion) sale of subsidiary DB Schenker to Danish freight firm DSV A/S, BNN Bloomberg reported.
Staff representatives of the EVG union plan to vote against the deal at a crucial supervisory board meeting of the German railway operator on Oct. 2, the newspaper Frankfurter Allgemeine Zeitung originally reported.
DSV confirmed that it has signed a deal to take over German logistics giant DB Schenker, which would create the world’s largest freight forwarder. The deal is conditional on approvals in the coming weeks by the Supervisory Board of Deutsche Bahn and by the German Federal Ministry for Digital and Transport. It would also be dependent on obtaining regulatory clearances, expected in the second quarter of 2025.
EVG chief Martin Burkert said the sale of DB Schenker would lead to job losses and hurt the country as a business location. He also said there was no guarantee that the proceeds will be used to lower Deutsche Bahn’s debt.
While the company’s supervisory board is split between labor and shareholder representatives, EVG alone doesn’t have the power to scuttle the deal. It’s also not clear if other staff representatives will join EVG’s protest.
Should there be a tie on the 20-member supervisory board, Chairman Werner Gatzer would have the power to break it with his double voting right.
DSV expects to finance the transaction through a combination of equity financing of about €4 billion to €5 billion and debt financing. Together, DSV and Schenker would have an expected pro forma revenue of about €39.3billion (based on 2023 numbers) and a combined workforce of about 147,000 employees in more than 90 countries.
“The acquisition of Schenker will strengthen DSV’s global network and capabilities. In addition to greater reach and better opportunities to serve its customers, the acquisition strengthens DSV’s platform for growth and the development of a more sustainable and digital transport and logistics industry,” DSV said in a press release.
The two firms said that they are a strong match with many similarities in business models and services and the deal will create a range of service offerings for customers across industry verticals.
The combination would create the world’s largest freight forwarder in terms of both volumes and revenues. DSV generated revenues of about US$22.3 billion in 2023 and DB Schenker US$22.1 billion, bringing the combined company total revenues of US$43.4 billion, compared to DHL Global Forwarding and Supply Chain (US$33.9 billion) and Kuehne+Nagel (US$31.7 billion).
The deal would also create an airfreight market leader with volumes (based on 2023 figures) of around 3 million tonnes – far above current market leader K+N’s 2 million tonnes, according to Armstrong & Associates.

Tags: DB Schenker, DSV