Deutsche Bahn eyes deal to sell Schenker by year-end, sources say

By Markus Wacket and Emma-Victoria Farr

BERLIN/FRANKFURT (Reuters) -German rail operator Deutsche Bahn expects at least 10 bidders to submit offers for its logistics subsidiary Schenker and aims to sign a contract for the sale in the second half of 2024, two people familiar with the matter told Reuters on Wednesday.

Schenker is expected to fetch between 12 billion and 15 billion euros ($13-16 billion) to help state-owned Deutsche Bahn cut its debt, the people said, speaking on condition of anonymity.

Initial offers with purchase prices must be submitted by the end of March, after which the pool of bidders will be significantly reduced, the two people, and a third person, said.

The sale is to be formally finalised in 2025, the first of the sources said.

Parties that have signalled interest so far include logistics rivals such as the Danish freight forwarder DSV and shipping company Maersk, as well as financial investors such as Bain, Advent, CVC and Carlyle, according to press reports.

Parcel delivery service UPS is also considering a bid, and Saudi Arabia's public investment fund (PIF) is supporting DSV with its bid, the second and third sources said.

Media reports have also said Abu Dhabi-based ADQ and Saudi Arabian shipping and logistics carrier Bahri are among those considering bids.

Maersk, Bain, Advent, CVC, Carlyle, UPS and ADQ declined to comment. DSV, PIF and Bahri did not immediately respond to requests for comment.

Earlier on Wednesday, German logistics giant DHL said it was not interested in joining the race to buy Schenker.

Deutsche Bahn is looking to sell Schenker to focus on its core railway business in Germany and to reduce its debt burden of more than 30 billion euros.

However, Schenker has been the group's most important profit driver in recent years.

High freight rates during the COVID-19 pandemic led to a record profit for Schenker of around 1.8 billion euros in 2022.

Schenker expects to make an operating profit of 1.1 billion euros and around 19 billion euros in sales this year, according to the first source.

($1 = 0.9198 euros)

(Reporting by Markus Wacket, Emma-Victoria Farr and Andres Gonzalez, additional reporting by Alexander Cornwell and Essi Lehto, Writing by Rachel More, Editing by Sabine Wollrab, Madeline Chambers, Mark Potter and Marguerita Choy)