DSV has confirmed reports that it has signed a deal to take over German logistics giant DB Schenker in a move that will create the world’s largest freight forwarder.
In an update issued this morning, the Danish forwarder said it had agreed to buy DB Schenker from state-owned railway firm Deutsch Bahn for €14.3bn – its biggest transaction to date.
The deal is conditional on approvals by the Supervisory Board of Deutsche Bahn and by the German Federal Ministry for Digital and Transport, which are expected in the coming weeks.
In addition, the acquisition is conditional on obtaining customary regulatory clearances, which are expected to be secured in the second quarter of 2025.
DSV expects to finance the transaction through a combination of equity financing of around €4-5bn and debt financing.
Until the closing of the transaction, DSV and Schenker remain two separate companies conducting business as usual.
“The acquisition of Schenker will strengthen DSV’s global network and capabilities. In addition to greater reach and better opportunities to serve its customers, the acquisition strengthens DSV’s platform for growth and the development of a more sustainable and digital transport and logistics industry,” DSV said in a press release.
Together, DSV and Schenker will have an expected pro forma revenue of approximately €39.3bn (based on 2023 numbers) and a combined workforce of approximately 147,000 employees in more than 90 countries.
Leading trade union Ver.di had expressed concern that the takeover could lead to job losses in Germany. It preferred the bid from the private-equity consortium led by CVC.
However, DSV has said it will invest €1bn in the firm’s German operations over the next three to five years and various central functions will stay in the country, including at the current headquarters in Essen.
DSV has also issued social undertakings for German employees in Schenker, which apply until two years after closing. Collective agreements and individual employment conditions for German employees on the closing date will “generally be retained” in the two years period.
“The investments will contribute to long-term growth and job creation, as well as promoting modern and attractive workplaces. It is anticipated that five years from now, the combined organisation will have more employees in Germany than Schenker and DSV have today,” DSV said.
Jens Lund, group chief executive at DSV, said: “This is a transformative event in DSV’s history, and we are very excited to join forces with Schenker. With the acquisition we bring together two strong companies, creating a world-leading transport and logistics powerhouse that will benefit our employees, customers and shareholders.”
“By adding Schenker’s competencies and expertise to our existing network, we improve our competitiveness across all three divisions: Air & Sea, Road, and Solutions. As well as enhancing our commercial platform across DSV, the acquisition will provide our customers with even higher service levels, innovative and seamless solutions and flexibility to their supply chains.”
Schenker chief executive Jochen Thewes added: “The recent years have been the most successful in our company’s history and we have proven that DB Schenker is fit for the future. We are excited about the future prospects of the combined business. Together with DSV, our goal is to transform the industry and build a truly global market leader with joint European roots for the best of our employees and our customers.”
The two firms said that they are a strong match with many similarities in business models and services and the deal will create a range of service offerings for customers across industry verticals.
The integration planning will be a joint effort between DSV and Schenker and the specific plans will be developed between the signing and closing of the transaction.
“DSV is committed to a smooth transition that prioritises the continuity of service excellence for all Schenker customers and with careful consideration for employees and stakeholders,” the forwarder said. “DSV recognises the importance of combining the operations seamlessly and is dedicated to upholding the high standards both companies are known for.”
A new market leader
The deal will create the world’s largest freight forwarder in terms of both volumes and revenues.
According to consultant Armstrong and Associates, DSV generated revenues of $22.3bn last year and DB Schenker $22.1bn.
This would give the combined company total revenues of $43.4bn, ahead of DHL Global Forwarding and Supply Chain’s $33.9bn and Kuehne+Nagel’s $31.7bn.
In terms of airfreight volumes, the deal would also create a market leader with volumes (based on 2023 figures) of around 3m tonnes – far above current market leader K+N’s 2m tonnes.
However, some of these volumes would undoubtedly be lost as DSV looks to improve profitability and the usual loss of customers that seek to de-risk by spreading volumes amongst forwarders.
Meanwhile, competition authorities may require some sections of the business to be sold as part of the approval.
The deal would be the latest in a series of acquisitions over the last decade that has seen DSV grow rapidly into a leading player in the market. Recent deals include its takeover of Panalpina, UTi and Agility Global Integrated Logistics (GIL).
When the company announced the takeover of UTi in 2015, DSV was ranked as the world’s 16th largest airfreight forwarder. The deal pushed the company up to eighth, while the Panalpina deal put it in the top five and GIL the top three.
DSV has generally completed the integration of its acquisitions faster than expected.
Deutsche Bahn announced that DB Schenker was officially up for sale in December 2023 after spending a year mulling its options.
The forwarding giant is being sold by Deutsche Bahn as it looks to reduce debts.
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