CVC Credible Bid for Schenker Seen Critical to Deutsche Bahn Privatization Plans
Merger with DB Schenker Would Transform CVC Logistics Business
CVC Capital Partners has stepped up its campaign to convince Deutsche Bahn (DB) officials that its proposed takeover of DB Schenker would be a major boon to the German company's privatization plans.
In a strongly worded letter sent to DB's management board, CVC argued that its 20 billion euro ($22.3 billion) bid is a "unique opportunity" for DB to streamline its operations and focus on its core rail business.
The private equity firm also highlighted the strong track record of its logistics unit, which it claimed has grown significantly in recent years through a combination of organic expansion and acquisitions.
CVC's Bid Pitched as Catalyst for DB Privatization
CVC's bid is part of a wider push by DB to sell off non-core assets as it seeks to reduce its debt pile and improve its financial performance.
The German government has set a target of privatizing up to 49% of DB by 2024, and the sale of Schenker is seen as a key step in achieving this goal.
In its letter, CVC said that its bid would "accelerate" DB's privatization plans and provide the company with the financial flexibility to invest in its core rail operations.
Schenker Merger Would Create Logistics Giant
A merger between CVC's logistics unit and Schenker would create one of the world's largest logistics companies, with combined revenues of over 30 billion euros ($33.4 billion).
The combined entity would have a global reach and a diverse portfolio of services, ranging from freight forwarding and contract logistics to supply chain management and e-commerce logistics.
CVC has argued that the merger would create a "European champion" in the logistics sector and would provide customers with a more comprehensive range of services.
DB Weighs Schenker Options
DB is currently evaluating CVC's bid, as well as interest from other potential buyers, including Apollo Global Management and Brookfield Infrastructure Partners.
The German company is expected to make a decision on the sale of Schenker in the coming months.
If CVC's bid is successful, it would mark a significant step in the privatization of DB and would transform the competitive landscape of the global logistics industry.
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