Danish logistics heavyweight, DSV has acquired DB Schenker from parent Deutsche Bahn, in a transaction worth EUR 14.3 billion. Including expected interest income until closing in Q2, 2025, the total sales value amounts to EUR 14.8 billion. CargoForwarder Global already reported on the upcoming takeover of DB Schenker on Friday 13SEP24.
Following the takeover, the world’s largest logistics company will emerge, well ahead of Kuehne+Nagel and DHL. This applies to all divisions – air and ocean freight, road transportation and solutions.
The outcome of the bidding process was completely open until the current decision. Financial investor CVC, the remaining competitor, offered financial conditions similar to those presented by DSV. It also offered the German state or Deutsche Bahn to retain 24.9% in Schenker. In the event of an IPO at a later stage, this part could then be sold with a billion euro increase in value, the capital investor reasoned.
Politicians forced Deutsche Bahn to sell Schenker
However, Deutsche Bahn and above all the Ministry of Transport headed by Volker Wissing (Liberals) have awarded the contract to DSV. The loss-making railway company, troubled by a dilapidated infrastructure resulting in a lack of punctuality and repeated technical disruptions, was urged by Berlin’s government coalition (Social Democrats, Greens, Liberals) to sell Schenker in order to concentrate on its core business – rail transportation – and reduce its debt burden of EUR 30+ billion. However, Schenker is the only division within DB earning money. “You can only sell silverware once,” commented a source.
As the new 100% owner, DSV plans to invest nearly one billion euros in Germany over the next three to five years. Various central business functions will stay there, including Schenker’s decision center in Essen, North Rhine-Westphalia. The investments will contribute to long-term growth and job creation, as well as promoting modern and attractive workplaces, DSV states in a release. Its management anticipates that in five years from now, the combined organization will have more employees in Germany than Schenker and DSV have today. All Schenker jobs will be maintained for a period of two years after completion of the transaction. Combined, both companies have 147,000 headcounts worldwide. They generate annual sales of EUR 39.3 billion (2023).
Schenker’s name will vanish in 2027 – latest
Until the closing of the transaction, DSV and Schenker remain two separate companies conducting their businesses as they have done so far. At the same time, both management boards are working on the integration of Schenker into DSV, because of which Schenker will lose its name, ending 152 years of proud company history.
On the occasion of the takeover announcement, Jens H. Lund, Group CEO, DSV stated: “This is a transformative event in DSV’s history, and we are very excited to join forces with Schenker. With the acquisition, we bring together two strong companies, creating a world-leading transport and logistics powerhouse that will benefit our employees, customers and shareholders.”
The executive went on to say: “By adding Schenker’s competencies and expertise to our existing network, we improve our competitiveness across all three divisions: Air & Sea, Road, and Solutions. […]. The acquisition will provide our customers with even higher service levels, innovative and seamless solutions, and flexibility to their supply chains.”
Jochen Thewes, CEO, Schenker replied to this: “DB Schenker is one of the most powerful and innovative teams in transportation and logistics with more than 150 years of experience. The recent years have been the most successful in our company’s history and we have proven that DB Schenker is fit for the future. We are excited about the future prospects of the combined business. Together with DSV, our goal is to transform the industry and build a truly global market leader with joint European roots for the best of our employees and our customers.”
Panalpina is a cautionary example
Future-oriented and positive statements such as those made by Thewes are common in company mergers. Their primary purpose is to avoid creating job fears among employees. However, it remains to be seen whether Thewes and Schenker’s top management will still be sitting on their chairs after the two-year peace period has expired.
Market experts point to Panalpina, where thousands of Panalpina employees lost their jobs once DSV took over the Swiss forwarding agent on 01APR19. “Our company was completely gutted in a short period of time,” a former Panalpina executive told CargoForwarder Global. This happened despite an integration committee with equal DSV and Panalpina representation having been set up to ensure the fair treatment of all employees. In retrospect, its setting up proved to be a sop to Panalpina shareholders to facilitate the takeover of the Swiss logistics company by DSV without much fanfare.
History sometimes repeats itself
Many positions will initially be formally filled twice once integration gains momentum. Then it will soon become clear who stays and who must go, despite all the vows to work together as partners and make consensus-oriented decisions to embark on a bright future.
It remains to be seen whether the DSV-Schenker deal will trigger a new round of mergers. Competitors such as DHL, Kuehne+Nagel, Sinotrans or Nippon Express will probably try to increase their market power not only by growing organically, but also through acquisitions. They might also win Schenker customers Schenker who switch to other logistics service providers because they oppose the DSV takeover deal.
