DSV A/S, the Danish logistics giant, has pledged to limit job cuts at Deutsche Bahn AG’s logistics subsidiary, DB Schenker, as it seeks to gain an edge in the competitive bidding process for the unit. This move is seen as a strategic effort to win favor over rival bidders by addressing employment concerns, according to sources familiar with the matter.
In a recent letter sent to Deutsche Bahn’s management and government representatives, DSV committed to reducing between 1,600 and 1,900 jobs at DB Schenker’s German headquarters, according to anonymous insiders. Crucially, the company promised to avoid layoffs in blue-collar positions, focusing instead on administrative and non-operational roles. These measures are intended to align with ongoing streamlining efforts at DB Schenker that have yet to be factored into DSV’s plans.
This move comes after Verdi, Germany’s largest labor union, offered its support to a consortium led by private equity firm CVC Capital Partners, which is also in the race for DB Schenker. Verdi has raised concerns about potential job losses, estimating that as many as 5,300 additional jobs could be at risk if Deutsche Bahn were to sell to DSV rather than CVC, as indicated in a memo circulated to supervisory board members and government officials.
Despite these concerns, some insiders report that DSV’s €14 billion ($15.5 billion) bid is currently the frontrunner, even though CVC’s offer is similarly priced. CVC’s bid includes a condition that part of the purchase price is tied to DB Schenker meeting certain profitability targets in the coming years, which some view as a disadvantage in comparison to DSV’s cleaner offer. However, no final decision has been made, and both bidders may revise their proposals to improve their positions.
As part of its strategy to sweeten the deal, DSV has outlined plans to integrate certain elements of its German operations into DB Schenker, recognizing the importance of the unit within its broader network. Additionally, DSV has committed to investing €1 billion over the next three to five years in upgrading Schenker’s German infrastructure, terminals, and offices, further signaling its long-term commitment to the business.
Deutsche Bahn has confirmed that it is in advanced discussions with bidders, but remains unsatisfied with the current offers. The company emphasized that any sale must be economically advantageous and that employment protections will remain consistent across all bids. Deutsche Bahn also reaffirmed that the ultimate goal of the sale is to significantly reduce its debt burden and refocus on its core business operations.
DSV’s commitment to preserving jobs and investing in DB Schenker’s future could prove decisive in the final stages of negotiations, potentially positioning the company to secure the acquisition. For investors, this represents a significant opportunity, as acquiring a leading logistics player like DB Schenker could bolster DSV’s market share and enhance its strategic footprint in Europe.
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