Maersk Drops Out of Bidding for Logistics Giant DB Schenker

A DB Schenker logistics hub near Gothenburg, Sweden.

(Bloomberg) -- A.P. Moller-Maersk A/S withdrew its bid for DB Schenker, the logistics unit of Deutsche Bahn AG that’s been reported to be valued at more than €15 billion ($16.1 billion).

Maersk walked away from the process after participating in an in-depth due diligence over the past few weeks, according to a statement on Monday. Bloomberg News earlier reported the Danish logistics giant was considering pulling out.

“We said we would look into this opportunity, and we did,” Maersk Chief Executive Officer Vincent Clerc said, calling DB Schenker an interesting company with potential.

“The in-depth review also identified areas of challenges from an integration perspective and ultimately, we concluded that acquiring DB Schenker would not be the right thing to do for our business at this time,” he said.

Deutsche Bahn said in emailed comments that the sales process is “going according to plan,” but it won’t comment on individual bidders, details of talks, the sales process itself or price speculation.

“We are currently in intensive discussions with the various parties interested in DB Schenker,” Deutsche Bahn said. “We will inform of any decisions in due course. The condition for a sale remains that it must be economically advantageous for Deutsche Bahn.”

Other bidders remain interested in the asset, according to people with knowledge of the matter who asked not to be identified as the information is private.

Credit Positive

Bloomberg News reported in May that Deutsche Bahn had received a handful of confirmatory bids for the logistics unit, which could fetch more than €15 billion. A consortium led by CVC Capital Partners Plc and Carlyle Group Inc. submitted an offer, people familiar with the talks said at the time. DSV A/S and MSC Mediterranean Shipping Co. were also among the bidders, the people have said.

A representative for DSV said the company is aware of Maersk’s announcement on Monday, but “will not add any comment to possible M&A activity.”

Maersk shares rose as much as 7% in Copenhagen following the statement, while DSV gained as much as 6.6%, suggesting investor relief at a lower likelihood of overpaying.

Some analysts considered DSV the front-runner to win the battle for DB Schenker. The company has built a reputation as a master integrator of its acquisition targets, often raising the group’s combined profit margin once the takeover has been digested. Even so, winning the DB Schenker bid could impair DSV’s financial risk profile, potentially building pressure on the company’s credit rating, Brian Borsting, chief analyst at Danske Bank Credit Research, said in a note.

For Maersk, pulling out of the bidding is “credit positive,” Borsting added.

Considering the transaction was always a peculiar turn for Maersk’s CEO. In February 2023, when he was just one month into his job, Clerc specifically ruled out any interest in DB Schenker, saying there’s no “long-term shareholder value in making a huge deal.” But a year later, he told analysts that he’d changed his mind and Maersk needed to consider the German target because a deal “will change the landscape in logistics.”

Maersk, which controls about one-sixth of the world’s container trade, is pursuing a strategy to build out its land-based transport and its freight-forwarding activities — where profit margins historically have been higher than at sea — through takeovers and organic growth.

--With assistance from Christian Wienberg, Christopher Jungstedt and Laura Malsch.

(Updates with comments from Deutsche Bahn and DSV from fifth paragraph, analyst comment in 11th paragraph)

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