The current third in the world in transport commissioning sold some 26.4 million new shares in record time to finance the acquisition of the number three in the sector, DB Schenker. The capital increase, carried out within a few hours, follows the approval by the supervisory board of Deutsche Bahn of the sale of its lucrative subsidiary.
Despite the outbidding attempted by the rejected candidate CVC Capital, the opposition of the DB Schenker unions and the powerful German services union Ver.di, which estimates the social damage at 5,300 jobs out of the 15,000 Schenker jobs in Germany, amid political outcry, the supervisory board of Deutsche Bahn approved on Wednesday October 2 the sale of DB Schenker to the Danish DSV.
Crippled with debt (€34 billion for a turnover of €57 billion), the historic German rail operator, which seeks to concentrate on the overhaul of the national railway infrastructure, has sold its very lucrative commission subsidiary transport (€1.1 billion in operating profit in 2023 although down) and the group’s cash cow (42% of its revenues in 2023) at a price of €14.3 billion. The operation represents the largest transaction for the Dane who has multiplied his acquisitions since 2016 (UTi Worldwide for $1.35 billion, Panalpina for €4.92 billion, Global Integrated Logistics for €4.2 billion).
The supervisory board vote was nevertheless close. Nine voices were raised to counter the sale. Ten votes were in favor of the transaction and one abstained. The EVG railway union had said its members would reject the deal, not least because of the job risks.
DSV has made social commitments to Schenker employees in Germany, which will apply for two years after the conclusion of the transaction and policy by promising $1 billion in the country over the next three to five years.
12.3% of the value of its share capital
Following the approval of Deutsche Bahn, the Danish group announced on Friday October 4, through a stock market press release, that it had raised €4.99 billion via an issue of 26.4 million new shares. The sale at a price of 1,410.5 Danish crowns each (€189.11) corresponding to its closing price on the Copenhagen Stock Exchange. A capital increase carried out in a few hours and without discount. The operation must have aroused total confidence on the part of investors, it made it possible to raise the equivalent of 12.4% of the value of its current share capital and 11% after the completion of the increase in capital.
The buyers are Danish and international institutional investors (Blackrock, Canada Pension Plan Investment Board, Capital Group, Norges Bank Investment Management, BLS Capital Fondsmæglerselskab, ATP…).
Birth of a new world leader
The number three of the transport commission had previously indicated that he intended to finance the purchase of the fourth world player by combining equity financing (around €4 to €5 billion), without pre-emptive rights for existing shareholders, and debt. The company has secured financing facilities from BNP Paribas, Danske Bank, HSBC and Nordea for the transaction.
DSV and DB Schenker are expected to achieve pro forma turnover of around €39.3 billion based on 2023 figures (147,000 people in over 90 countries) with equity of €11 billion. They rise to the world number one position currently occupied by Kuehne+Nagel.
The sale is expected to be finalized sometime in 2025, once all regulatory approvals have been received.
Adeline Descamps
