DB Schenker sale moves closer

News 12 Sep 2022 by WCN Editorial

Der Speigel and Reuters indicate that the sale of DB’s multimodal logistics arm could raise up to €15B

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As widely anticipated, the German government is moving closer to approving a sale of DB Schenker AG, the multimodal logistics arm of state-owned railway company, Deutsche Bahn AG. In anticipation of a sale, some parts of the business have already been taken in by DB Cargo AG.

Both options, a direct sale and an IPO, are “on the table.” A sale in either scenario is not expected before 2024, in the hope that the global economy will have improved by then and supply chain problems eased.

According to Der Spiegel, Berlin aims to hypothecate the sale proceeds to the railways, specifically improving rail infrastructure in order to promote further modal shift. This sounds good, but in future DB schenker’s profits would not be available to DB AG to improve DB Cargo AG’s freight services, and subsidies from Berlin would meanwhile be cut. DB Schenker has a payroll of around 75,000 worldwide and generated a profit of around €1.2B in H1 2022.

Financial circles in Germany have valued the company at between €12B and €20B, a very wide range,

depending on the state of the German economy, the eurozone, the situation in Ukraine at the time of sale. Hence a sale now is not a good idea.

Banks are expected to start the pre-marketing process starts next year, so a sale is unlikely before 2024.

Possible buyers mentioned in the past have included Kühne+ Nagel, Maersk and DSV. In 1991, the then Deutsche Bundesbahn sold Schenker to the VEBA subsidiary, Stinnes, and in 2002 the new Deutsche Bahn bought Schenker back for €2B.

Neither DB AG nor the federal government would comment on the latest reports.