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German rail operator Deutsche Bahn announced Friday the sale of its logistics unit Schenker to Danish group DSV for 14.3 billion euros ($15.8 billion) to create a freight-forwarding giant.
The state-owned German group, which has faced mounting criticism due to creaking infrastructure and poor punctuality, said the deal would provide fresh investments into Europe's biggest economy and help pay down its monster debts. "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," DSV chief executive Jens Lund said in a statement.
The new entity will aim to compete with other heavyweights in the sector, like DHL, UPS and Fedex. DSV, founded in 1976, said the deal was its biggest transaction to date. The combined companies will have 147,000 employees in more than 90 countries and generate revenue of 39.3 billion euros. The transaction is expected to close in 2025.
Despite fears about job cuts following the sale, DSV insisted Germany will remain a "key market" for the company and it will retain Schenker's offices in Essen, western Germany.
Deutsche Bahn launched the sale of Schenker, its most profitable subsidiary, at the end of 2023, seeking funds to pay down a 30-billion-euro debt and plough desperately needed investments into Germany's creaking rail infrastructure. Deutsche Bahn CEO Richard Lutz said that the sale was the largest transaction in the operator's history and "provides our logistics subsidiary with clear growth prospects".
The Danish group plans to invest one billion euros in Germany over the next three to five years, Deutsche Bahn said.
The German rail group said the sale will enable it to focus on its top priority -- improving rail infrastructure and operations, which are also seen as key to helping Germany reach climate goals.
Lewis Musonye
