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Bloomberg
German national railway operator Deutsche Bahn AG has taken the first concrete steps to prepare for a potential sale or listing of its DB Schenker logistics unit, which could be around 20 billion euros ($23 billion).
The government-owned company is working with a consultant and legal advisers to ready the business for a possible transaction later this year, said the people, who asked not to be identified because discussions are private. Options being considered range from a full or majority stake sale, to the potential disposal of a minority holding or an initial public offering.
Schenker, like other transport and logistics firms, has gained in value during the Covid-19 pandemic, according to the people.
Even though the German government hasn’t made a final decision on whether to pursue a sale, buyout firms are lining up in anticipation. Carlyle Group and CVC Capital Partners are in talks to team up on a bid, while Advent International and Bain Capital as well as Blackstone Inc. may also seek to team up, the people said.
Schenker could also attract rival logistics companies. Danish transport giant DSV would be interested in buying DB Schenker if the German state decides to sell, Chief Financial Officer Jens Lund said in July. Other potential suitors in that space could include Germany’s Deutsche Post AG and Kuehne & Nagel International AG of Switzerland.
The chances of Germany’s government selling state-owned assets and company stakes increased after the three-party coalition agreed late last year to name Christian Lindner of the pro-business Free Democrats as finance minister. He’ll have to win over Chancellor Olaf Scholz’s Social Democrats, who rely strongly on union voters, as well as the Greens.
But given their broad agreement on significant investments required to expand and improve Deutsche Bahn’s rail network to help combat climate change, there is a reasonable chance they’ll accept at least a partial sale.
Schenker helps transport goods by land, air and ocean and employs more than 74,500 people across about 2,100 locations globally. The unit reported record first-half operating profit of nearly 630 million euros in 2021 on back of high demand for logistics services. That came even as the pandemic dragged parent Deutsche Bahn to an operating loss of 975 million euros for the period.
A sale of Schenker would rank among the largest corporate carve-outs this year. Swiss drugmaker Novartis AG is exploring a potential sale of its generics unit, Sandoz, which could be valued at around $25 billion.