Deutsche Bahn is now officially offering its logistics subsidiary DB Schenker for sale. The expected billions in proceeds are intended primarily to pay off the state-owned company’s mountain of debt.
Deutsche Bahn has initiated the sale process for its international logistics subsidiary DB Schenker. From now on, interested parties can bid for the subsidiary, the federally owned company announced.
In the next few weeks, a group of seriously interested bidders will be selected for the logistics provider. According to company circles, a complete sale to a competitor or an investor is favored. An IPO with gradual privatization, however, is considered unlikely.
Railway should reduce mountain of debt
The bidding process should be carried out openly and without discrimination in accordance with the rules of EU state aid law, the railway said. The sale proceeds are to remain entirely within the group and a large part of them will be used to reduce the high liabilities, which currently amount to over 30 billion euros.
In December last year, the supervisory board of Deutsche Bahn commissioned the state-owned company to examine and prepare the sale of “up to 100 percent of DB Schenker.” At the end of September, the railway informed the committee that the examination had been completed and the search for a buyer was beginning.
In the globally fragmented logistics market, Schenker is one of the four largest in the world in the business areas of land transport, sea and air freight. The company employs over 75,000 people at more than 1,800 locations in over 130 countries. In recent years, the railway’s logistics subsidiary has made high profits and helped the group to stay in the black. According to the Reuters news agency, Schenker is said to have earned one billion euros before interest and taxes (EBIT) this year. In 2022, during the logistics boom, it was still 1.8 billion euros.
Double digits Billions in proceeds possible
Despite the recent business slowdown, industry experts expect a high level of interest in the bidding process. In addition to financial investors, competitors such as the Danish DSV, the shipping company Maersk and DHL also come into consideration.
In the financial industry, Schenker was at times valued at around 15 billion euros. In addition to the weaker business, the interest rates that have risen since 2022 are also likely to depress the sales value.
Sale politically desired
The decision to sell was controversial for a long time. In view of the railway’s high level of debt and financial needs for the upcoming renovation of the rail infrastructure, the sale of the subsidiary is politically desired.
In addition, many critics believe that the company, with its high share of air, sea and road freight, does not fit in with the railways. In view of the numerous problems on the railways, they are demanding that the federally owned company concentrate more on its core business again. To do this, he should above all unbundle his extensive corporate structure with hundreds of subsidiaries all over the world.