In an agreement that would make it the largest logistics company in the world, Deutsche Bahn’s logistics division Schenker will be acquired by Denmark’s DSV for 14.3 billion euros ($15.85 billion).
The largest acquisition made by a Danish business will lift DSV over DHL Logistics and the Swiss group Kuehne und Nagel in terms of both volume and revenue.
However, the combination will still only hold between 6% and 7% of the highly fragmented global logistics sector.
DSV began as a little business with ten truck drivers in 1976 and has expanded through a series of acquisitions, occasionally acquiring businesses that were larger than it.
CEO Jens Lund told reporters, “The size of this one is larger than all the transactions we’ve done before.”
To cut debt and focus on its primary train operation in Germany, Deutsche Bahn listed Schenker for sale last year.
Following the withdrawal of offers from Maersk and Bahri, financial investor CVC was the only bidder still in the running to purchase Schenker.
Laptops 1000After recent increases spurred by rumors of an impending transaction, DSV shares increased as much as 4% at the opening and were trading 0.2% lower at 0949.
In a note, Bernstein analysts stated, “The deal shape is broadly in line with our thinking but at a slightly better price.”
Debt funding and an equity raise of four to five billion euros would be used to finance the all-cash deal, according to DSV.
The group will employ around 147,000 people in more than 90 countries, generating revenue of 293 billion Danish crowns ($43.52 billion) based on 2023 results.
Michael Ebbe, the Chief Financial Officer of DSV, said that the company intended to eliminate 1,600–1,900 jobs from Schenker’s 15,000 employees in Germany.
However, he emphasized that the combined group will have more employees in Germany in five years than Schenker and DSV combined do now, thanks to planned investments of one billion euros.
