Media reports suggest that the process of selling Schenker is approaching its conclusion, with both Reuters and Bloomberg basing reports about the sale on quotes from “people familiar with the matter”. It had been confirmed previously that most of the other companies bidding for Schenker had already dropped-out, notably Maersk. This has left two companies reliably believed to be interested in buying the subsidiary of Deutsche Bahn; the logistics service provider DSV and a consortium led by the investment company CVC Capital Partners.
On Friday Reuters stated that the two companies had each valued Schenker “at around 14 billion euros ($15.6 billion)”. However, Bloomberg contradicted this, with a report that “the CVC-led group also tabled an offer of as much as €16 billion that would see the German government reinvesting for a roughly 25% stake in DB Schenker, the people said, declining to be identified because the information is private. The buyout firm pledged to keep the DB Schenker brand as well as its German headquarters in its proposals”. The mention of retaining a German headquarters may be important, as may the opportunity to permit the German government to retain some sort of involvement in Schenker. The present Chancellor, Olaf Scholz, had stated several years ago that the German government was opposed to the sale of Schenker, possibly influenced by the opposition to the sale by the German rail trade unions. Anything that makes the sale of Schenker less of a rupture with the status quo would probably be welcomed by both Deutsche Bahn and the German government.
There are rumours that DSV has made a higher offer of €15bn, which prior to the more complex CVC bid, had made DSV the favoured candidate. Whilst the press reports are not necessarily reliable, it is worth noting that CVC may have more flexibility in shaping a deal. Presumably DSV is aspiring to absorb Schenker in the fast and effective way it has absorbed so many businesses, including Panalpina. This may not be to everyone’s taste in Berlin. How good an owner CVC would be is another question, however private equity companies are very much in the business of buying and selling companies if not running them. This might decide things in this competition.
Source: Ti Insight
Author: Thomas Cullen
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