CVC Capital Partners, a prominent private equity firm, has taken a significant step in its pursuit of acquiring DB Schenker by communicating directly with the management and supervisory boards of Deutsche Bahn. In a recent letter, CVC outlined the advantages of its alternative proposal, which includes a notable reinvestment plan that would allow Deutsche Bahn to retain a stake of up to 24.9% in the logistics company.
According to insiders, CVC has assured that Deutsche Bahn could expect to generate between €2 billion and €2.5 billion from the reinvestment on its remaining stake when CVC eventually exits the investment. This positions CVC’s alternative offer as potentially worth at least €16 billion in total, showcasing the financial viability and attractiveness of their proposal.
In addition to this substantial reinvestment, CVC has also tabled an offer of approximately €14 billion for complete ownership of Schenker’s capital, a bid that is competing closely with Denmark’s DSV, which is also in the running to acquire the logistics giant.
Insights from a reliable source indicated that CVC’s proposal is crafted to ensure that DB Schenker retains its independence and maintains its brand identity. Furthermore, the headquarters will remain in Germany, and job security for employees in the region is a priority. The plan also hints at the possibility of a public offering (IPO) when market conditions become favorable.
In a compelling excerpt from the letter, CVC expressed its concerns regarding the sales process, stating, “We feel compelled to send you the key points of our (alternative) offer directly, as to our knowledge our complete offer was neither presented in detail nor discussed in the relevant steering committee.” This highlights the urgency with which CVC wishes to ensure their proposal is considered in the decision-making process of Deutsche Bahn’s Management and Supervisory Boards.
As the bidding war intensifies, the letter comes on the heels of a Reuters report suggesting that DSV is slightly ahead in the competition for Schenker. Sources familiar with the sale process noted that DSV’s offer is currently viewed as the most attractive following a recent meeting of a government committee tasked with evaluating the bids.
The logistics sector is witnessing significant shifts as companies like CVC and DSV vie for control over key players like DB Schenker, which has established itself as a leader in the logistics industry. The outcome of this bidding war could reshape the competitive landscape of logistics and supply chain management in Europe and beyond.
As negotiations progress, stakeholders within the industry will be closely monitoring how Deutsche Bahn responds to CVC’s alternative offer and whether it will impact the current standing of DSV in the bidding process. The strategic decisions made in the coming weeks will undoubtedly have lasting implications for all parties involved, including employees, investors, and customers.
