Port Technology — 2023-03-09
Land transportation
German rail operator, Deutsche Bahn, has selected Goldman Sachs, Morgan Stanley, and Deutsche Bank to run a sale of its logistics arm for up to €20bn ($21.1bn).
Reuters reports that the final details on the sale of the unit Schenker are being decided and the mandates have yet to be formally signed off.
Deutsche Bahn and the banks will meet in Berlin by 2023 March 10.
According to Reuters, a representative of Deutsche Bank confirmed that the German lender has been given an advisory role with Deutsche Bahn in regards to the sale, and Bloomberg first reported on 2023 March 7 that Goldman Sachs and Morgan Stanley had been selected to advise on the sale.
The process will not start before the third quarter of 2023.
Reuters reports that an Initial Public Offering (IPO) of Deutsche Bahn’s division has also been discussed and the process is likely to be dual track.
Any cash generated would help the German state-owned rail business to cut debt and invest in the infrastructure of its railway network.
Trade players such as Danish transport firm, DSV, Deutsche Post’s DHL, and French logistics business, CMA CGN, reportedly have an advantage over financial sponsors in volatile debt financing markets if they choose to bid all equity.
Investment companies including CVC, Carlyle, Advent, Bain and Blackstone have reportedly spent time in 2022 looking at Schenker. These bidders may choose to team up on a bid to finance a deal, reported Reuters.
German unions will play an important role in a potential deal according to Reuters, possibly favouring private equity bidders on the basis that they are likely to create jobs rather than cut them.
In 2023 January, Deutsche Bahn’s management board asked its supervisory board for the go-ahead to prepare a sale of its international logistics subsidiary Schenker.