DSV is officially acquiring DB Schenker from German railway Deutsche Bahn for 14.3 billion euros ($15.9 billion) in an all-cash deal that merges two logistics giants and creates the world’s largest freight forwarder by revenue.
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With DSV generating 150.8 billion Danish krone ($22.4 billion) in revenue 2023 and Schenker reeling in 19.1 billion euros ($21.2 billion), both companies made a combined $43.6 billion last year. This puts the combined firm well ahead of the revenue totals at the other forwarding titans Kuehne + Nagel ($28.2 billion) and DHL’s global forwarding division ($21.4 billion).
According to logistics market research firm Armstrong & Associates, DSV and DB Schenker were already the third- and fourth-largest freight forwarders in the world ahead of the deal. But post-acquisition, DSV estimates the combined company’s global market share will be between 6 percent and 7 percent—illustrating the logistics industry’s wider fragmentation even after a major takeover.
The transaction is expected to be accretive to DSV’s earnings per share in year two after its anticipated closure in the second quarter of 2025.
“This is a larger integration. But we don’t see that, apart from the size, that it’s a different exercise that we go into than the one we have experienced before,” said DSV CEO Jens Lund during a Friday morning presentation. “After year three, we expect that the businesses will make at least the same margins as we do today in DSV, across the board, and over time, we might even do a little bit better than that.”
Combined, 44 percent of the revenue comes from the firms’ air and ocean forwarding businesses, while another 33 percent originates from freight on the road. The remaining 23 percent comes from contract logistics, which includes transportation and warehousing.
Within the air and sea division, the addition of Schenker’s global network will handle approximately 4.3 million containers (TEUs) and approximately 2.4 million metric tons of air freight annually.
Contract logistics solutions will get a significant boost, nearly doubling warehouse space. Schenker provides additional warehousing capacity of approximately 90 million square feet to DSV, bringing the total capacity to approximately 190 million square feet across more than 60 countries, significantly expanding the customer offerings.
DSV and Schenker keeps their clients close to the vest, but both work with fashion retail players. The former has a partnership with Under Armour , while the latter has managed logistics services for Prada .
In a statement, DSV said the combined firm would have a joint workforce of around 147,000 employees across more than 90 countries. As part of the takeover, the Danish logistics firm plans to invest 1 billion euros ($1.1 billion) over the next five years in Germany. The organization anticipates that by 2029, it will have more employees in Germany than Schenker and DSV have today.
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DSV’s bid beat out an offer from a private equity consortium led by CVC Capital Partners, which was the preferred buyer of Germany’s leading trade union, Ver.di . In August, the union warned Deutsche Bahn against selling Schenker to DSV, arguing that the takeover would cost Schenker 5,300 of its 15,000 jobs in the country.
DSV countered Ver.di’s concerns initially by saying no more than 1,000 jobs would be affected in the short term, but later promised that no cuts in Germany would take place for two years after the deal closes.
German media reported that overlaps between DSV and Schenker would likely mean some 1,600 to 1,900 job cuts, or 13 to 15 percent of the full-time jobs in the country.
“The German situation is constructed in such a way that we are encouraged to find a deal with the unions, or the works council, as you call it in Germany. They’re actually focused and eager to find out how the company is going to look after the integration,” said Lund. “We will, as always, work together with our counterparties, and given the interaction we’ve had, I don’t foresee that we shouldn’t be able to strike a deal with them.”
Lund said any job losses will likely come via “natural churn” and staff turnover during the integration phase.
Deutsche Bahn had sought to offload the Schenker unit since December last year, with the company instead opting to focus on its core railroad business and cut its more than $30 million in debt.
The transaction still needs approval from Deutsche Bahn’s board and by the German Federal Ministry for Digital and Transport in the coming weeks, as well as customary regulatory approvals.
Until the closing of the transaction, DSV and Schenker will remain two separate companies conducting business as usual.
The transaction is not expected to have an impact on DSV’s results in 2024, and therefore DSV’s standalone annual guidance remains unchanged. Long term financial targets for 2026 will remain unchanged until closing of the transaction.
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