Deutsche Bahn prepares to sell subsidiary DB Schenker

Deutsche Bahn (DB) headquarters in Berlin (Image: Deutsche Bahn)

 
The railway group said on Thursday it had assigned its management board to review and prepare a case for the sale of up to 100% of its stake in DB Schenker, the world's fourth-largest airfreight forwarder.

“Decisions as to the categorical initiation of a divestment process and the form any sale may take will be made separately at a later date,” Deutsche Bahn said.

The group argues that selling the forwarding business will allow it to focus more on its Strong Rail Strategy and core business.

Deutsche Bahn explains: “The objective of the Group strategy, which was launched in 2019, is to shift traffic to environmentally friendly rail, in both passenger and freight transport, and to expand the rail infrastructure in Germany.”

Deutsche Bahn added that although DB Schenker has achieved record results in recent times, in the medium term the company will need greater financial resources and more independence to make international acquisitions to maintain and enhance its market position.

“For this reason, a sale could open up new opportunities for DB Schenker in terms of growth and development,” said Deutsche Bahn.

"The company’s position as a global market leader makes it attractive for buyers and investors," added Deutsche Bahn. “In the light of the economic challenges being faced worldwide and current uncertainty on the capital markets, DB does not want to rush a possible sale of DB Schenker."

“A starting date for a specific divestment process is dependent on the overall situation and not yet decided. A sale shall only take place if it is of financial advantage for DB Group compared to keeping DB Schenker in the Group.”

In the first half of 2022, DB Schenker generated €1.2 billion in operating profit, the best mid-year result in the company's 150-year history.

The company provides land, air and sea freight services and employs 76,100 people across 1,850 offices in more than 130 countries.

DB Schenker headquarters (Image: DB Schenker)

The planned sale doesn't come as much of a surprise, there's been speculation for a number of years that Deutsche Bahn isn't sure what it wants for its freight forwarding subsidiary with rumors of a resale popping up most recently in September.

The ongoing trend of market consolidation in the forwarding sector has caused the company to lose its top 3 spot to the fast-growing Danish forwarder DSV in recent years. Meanwhile, the gap between market leader Kuehne+Nagel and second-placed DHL Global Forwarding has widened.

DB Schenker will be transferred to a potential buyer if Deutsche Bahn achieves a financial interest in the DB Group, and DSV is one of the most likely candidates.

Danish forwarder DSV has grown rapidly in recent years through acquisitions and has previously expressed interest in DB Schenker if it were to go up for sale.

Based on 2021 figures, if DSV buys DB Schenker, it will become the world's largest air freight forwarder, surpassing both K+N and DHL with an annual volume of about 2.5 million tons.

Source: Phaata.com (According to Deutsche Bahn & AirCargoNews)

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