Mar 7, 2023
Deutsche Bahn Picks Goldman, Morgan Stanley for Sale of €20 Billion Logistics Arm
, Bloomberg News
(Bloomberg) -- Deutsche Bahn AG has selected Goldman Sachs Group Inc. and Morgan Stanley to advise on the potential sale of its DB Schenker logistics unit, which could be valued at as much as €20 billion ($21.3 billion), people with knowledge of the matter said.
The German railroad operator is set to formally hire the two banks after a weeks-long pitching process that was one of the most hotly contested in Europe, said the people, who asked not to be identified because discussions are private. Final details of the mandate are currently being finalized and could still change, the people said.
A spokesperson for Deutsche Bank AG said the German lender also expects to be handed an advisory role on the deal, declining to give further details.
Deutsche Bahn said in December it will explore a sale of DB Schenker. It is also considering a divestment of its Arriva transport business, Bloomberg News previously reported. Asset sales would help the German state-owned firm slash debt and modernize its domestic railroad operations, a key government priority.
Schenker is likely to attract bids from rival logistics companies. Danish transport giant DSV A/S reiterated in February that it’s ready for deals and said previously it would be interested in buying the business if the German state decides to sell. Other potential suitors in the industry could include Germany’s Deutsche Post AG and Switzerland’s Kuehne + Nagel International AG.
Representatives for Deutsche Bahn, Goldman Sachs and Morgan Stanley declined to comment.
Carlyle Group Inc. and CVC Capital Partners have held talks about making joint bid, Bloomberg News reported last year. Advent International and Bain Capital as well as Blackstone Inc. may also seek to team up, people familiar with their plans said at the time.
However, buyout firms may struggle to raise financing for such a big deal in the current environment. An initial public offering of Schenker has also been an option, the people said.
(Updates with detail on Deutsche Bank role in third paragraph.)
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