The Deutsche Bahn (DB) plans to sell its profitable logistics subsidiary, DB Schenker, to Danish competitor DSV for 14.3 billion euros. However, the sale faces potential opposition from labor representatives on the supervisory board, particularly the Railway and Transport Union (EVG).
Proposed sale of DB Schenker
The DB supervisory board is scheduled to vote on the sale of DB Schenker on Wednesday, October 2. However, the approval of the board is uncertain as the Railway and Transport Union (EVG) intends to oppose the sale, according to information obtained by the German Press Agency. The “Frankfurter Allgemeine Zeitung” also reported on EVG’s plan. If the EVG can convince other board members to support their position, the sale could potentially be halted.
DB Schenker, one of the few well-performing business units within the struggling DB Group, is set to be sold to Danish competitor DSV for 14.3 billion euros. The proceeds from the sale are intended to be used entirely for reducing the Group’s debt, which amounted to around 33 billion euros in the first half of the year.
Labor representation and voting process
The outcome of EVG’s late opposition to the Schenker sale remains uncertain. Half of the 20-member supervisory board represents the employees’ side. In addition to the EVG, the German Train Drivers’ Union (GDL) is also represented. It is unclear whether the GDL will also vote against the Schenker sale. The employer’s side of the DB supervisory board includes two state secretaries and three members of the German parliament.
In case of a tie in the vote, the chairman of the supervisory board, Werner Gatzer, could use his double voting right to push the decision through against the employee representatives.
Recently, private equity investor CVC Capital Partners had also expressed interest in acquiring Schenker. The employee representatives at Schenker would have preferred a sale to CVC. With the sale to DSV, they fear a larger reduction in workforce.
Financial performance of DB Schenker
DB Schenker has been a significant contributor to Deutsche Bahn’s financial performance. In the first half of this year alone, Schenker generated an operating profit (EBIT) of 520 million euros. It was largely thanks to Schenker that the railway company managed to return to profitability, at least temporarily, after the Corona crisis. In 2023, the logistics giant made a profit of 1.8 billion euros, pulling the railway company out of the loss zone, at least operationally.
The potential sale of this profitable subsidiary has raised concerns among labor representatives about the future financial stability of Deutsche Bahn and potential job losses. The outcome of Wednesday’s vote will be crucial in determining the future of DB Schenker and its impact on the Deutsche Bahn Group.
