DSV Acquires Schenker in Milestone €14.3 Billion Deal

Denmark's DSV has announced its acquisition of Schenker, Deutsche Bahn's logistics arm, for €14.3 billion. The deal is significant, propelling DSV to the forefront of the global logistics market and involves both equity and debt financing. Job cuts and union concerns are notable aspects awaiting regulatory approval.

Denmark's DSV has agreed to acquire Schenker, the logistics division of Germany's Deutsche Bahn, for €14.3 billion in a move that will establish it as the world's largest logistics company. The acquisition, the largest ever by a Danish firm, will elevate DSV above Swiss competitor Kuehne und Nagel in volume and revenue. Despite this, the company will only control 6% to 7% of the fragmented global logistics market.

DSV, which began with just 10 trucks in 1976, has expanded through a series of acquisitions, often taking over companies larger than itself. CEO Jens Lund highlighted that this deal surpasses all previous transactions. The sale of Schenker by Deutsche Bahn aims to focus on core railway operations and reduce debt, with CVC as the only other remaining bidder after Maersk and Bahri withdrew.

Following the announcement, DSV shares rose as much as 4% but later settled at 0.2% lower. Analysts noted that the deal's structure aligns with expectations, although at a slightly better price. The all-cash transaction will combine equity raising and debt financing. The merged entity will boast revenue of 293 billion Danish crowns and a workforce of around 147,000 across more than 90 countries.

DSV CFO Michael Ebbe stated that job cuts in Schenker's German workforce are planned, balanced by significant future investments in Germany. The deal, pending regulatory and ministerial approval, is expected to close in the second quarter of next year.

(With inputs from agencies.)