The Danish forwarder had beaten off competition from a CVC-led private equity consortium to buy Schenker, with the deal to be signed off in the coming days, reveal sources from within the German government and at the forwarder’s parent Deutsche Bahn.
The deal would still need to be signed off by the railway giant’s supervisory board, the report added. The board is made up of government, parliamentary and union representatives and will meet in the coming days.
Leading German trade union Ver.di had backed the offer from CVC because of concerns of job losses should DSV succeed, but union bosses appear to have lost out in their argument.
Following this development, DSV reportedly outlined how it would protect jobs and invest in DB Schenker.
DSV has said it aims to invest around €1bn into the forwarder within three to five years to make the business more profitable, according Reuters.
Both companies reportedly bid around $14bn for the company.
The deal will create the world’s largest freight forwarder in terms of both volumes and revenues.
According to consultant Armstrong and Associates, DSV generated revenues of $22.3bn last year and DB Schenker $22.1bn.
This would give the combined company total revenues of $43.4bn, ahead of DHL Global Forwarding and Supply Chain’s $33.9bn and Kuehne+Nagel’s $31.7bn.
In terms of airfreight volumes, the deal would also create a market leader with volumes (based on 2023 figures) of around 3m tonnes – far above current market leader K+N’s 2m tonnes.
However, some of these volumes would undoubtedly be lost as DSV looks to improve profitability and the usual loss of customers that seek to de-risk by spreading volumes amongst forwarders.
Meanwhile, competition authorities may require some sections of the business to be sold as part of the approval.
The deal would be the latest in a series of acquisitions over the last decade that has seen DSV grow rapidly into a leading player in the market. Recent deals include its takeover of Panalpina, UTi and Agility Global Integrated Logistics.
When the company announced the takeover of UTi in 2015, DSV was ranked as the world’s 16th largest airfreight forwarder. The deal pushed the company up to eighth.
DSV has generally completed the integration of its acquisitions faster than expected.
Deutsche Bahn announced that DB Schenker was officially up for sale in December 2023 after spending a year mulling its options.
The forwarding giant is being sold by Deutsche Bahn as it looks to reduce debts.
Earlier this year it was reported that Deutsche Bahn had asked interested parties to demonstrate their experience with logistics M&A deals of this size and that they have the appropriate financial resources. They must also explain what interest they have in Schenker and give an initial insight into their plans for the company if they were to win the contract.
