Denmark's DSV secures Deutsche Bahn unit despite union resistance

Danish firm DSV has secured a deal to buy Schenker, the logistics unit of German state railway Deutsche Bahn (DB).

The deal, signed on Friday, values Schenker at €14.3bn, with €11.3bn of equity.

Friday's announcement marks the largest sale in DB's history and will make DSV the world's biggest logistics firm.

DSV said it will finance the purchase through a share sale of as much as €5bn and debt financing.

"The acquisition of Schenker is a transformative transaction for DSV," said the Danish company in a statement on Friday.

"Together, DSV and Schenker will have a combined revenue of DKK 293bn… and a joint workforce of around 147,000 employees across more than 90 countries," it continued.

That's a combined revenue of around €39.26bn.

Richard Lutz, CEO of Deutsche Bahn, added: "It has been important for us to find a strong partner for Schenker and a long-term home for the employees of the company."

He noted that the sale provides DB's logistics subsidiary "with clear growth prospects".

DB is looking to sell Schenker, its most profitable division, to unlock investment for its domestic passenger business and reduce its debt.

The choice of buyer, however, will come as a disappointment to some.

Private equity firm CVC Capital Partners was also bidding for Schenker, proposing that DB could retain a 24.9% stake.

Although the offer from CVC was allegedly lower, the powerful Verdi union supported this bid, as they believed it would result in fewer job cuts.

DSV's Chief Financial Officer Michael Ebbe told Reuters it planned to axe between 1,600 and 1,900 positions out of Schenker's German workforce of 15,000.

Ebbe stressed, however, that the merged firm will build up employee numbers over a period of five years, so that German staff numbers will