Abu Dhabi wealth fund eyes DB Schenker?
18 / 12 / 2023
Photo: DB Schenker
It is just over a year ago that Deutsche Bahn announced it would examine how best to offload freight forwarding and logistics business DB Schenker.
Since the state-owned German railways giant made that statement, there has been no further announcements on the progress of the sale directly from Deutsche Bahn itself.
Instead, updates have come from press reports and politician statements, whether news on which companies could be interested in making a bid, or that the company will most likely be sold as a complete unit rather than split out into its various division for sale.
On the companies that could be interested in taking over the world’s fourth largest airfreight forwarder, DSV and DHL have been the front runners although the bidding process is yet to get underway.
However, last week German newspaper Handelsblatt reported that Abu Dhabi wealth fund ADQ could also be interested in bidding for the logistics giant.
The newspaper said that Deutsche Bahn is currently considering which criteria should be used to select a buyer.
But the potential bid from ADQ has some in the German government concerned over ownership of the company transferring to a Gulf state fund given the critical nature of transport services.
On the other hand, money raised from the sale will be used to modernise the German railways and ADQ is thought to be able to make a competitive offer.
Handelsblatt also reported that the estimated value of the company has fallen to around €12bn-€15bn from around €15bn-€20bn two years ago due to weakening market conditions.
When the sale was first announced, Deutsche Bahn said that selling its forwarding business would allow it to sharpen its focus on its Strong Rail Strategy and core business.
“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,” the company explained.
It added that while DB Schenker has achieved record results in recent times, in the medium term the company will require larger financial resources and more independence to make international acquisitions with a view to retaining and enhancing its market position.
“For this reason, a sale could open up new opportunities for DB Schenker in terms of growth and development,” Deutsche Bahn said.
“The company’s position as a global market leader makes it attractive for buyers and investors,” it added. “In 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.”
It added that a sale shall only take place if it is of financial advantage for DB Group compared with keeping DB Schenker in the Group.
