Investing.com -- Deutsche Bahn earlier this week finalized the sale of its logistics arm, DB Schenker, to Danish transport group DSV (CSE: DSV ) in a €14.3 billion deal.
Deutsche Bahn CEO Richard Lutz described the deal as "the largest transaction in the history of Deutsche Bahn and in the history of the logistics industry."
The agreement, first announced in September 2024, received approval from both the German government and antitrust regulators.
"With this acquisition, we become a world-leading player in global transport and logistics, at a time where global supply chains are more in focus than ever before," said DSV chief executive Jens Lund.
The combined operations of DSV and DB Schenker generated roughly €41.5 billion in revenue in 2024, with a global workforce of about 160,000 employees across more than 90 countries.
Following the news, Morgan Stanley analysts resumed coverage on DSV shares with an Overweight rating. "The Schenker acquisition brings together the number 3 and 4 players creating the largest player globally by revenue," analysts led by Cedar Ekblom said in a note.
Goldman Sachs also reinstated DSV coverage in response to this "transformational deal" with a Buy rating and the price target of DKK 2,000.
They expect DSV to boost the combined group’s margin to 10% by 2027/28, up from an estimated 8% in 2025 and slightly above the 2024 level of 9.6%. They also project EBIT to nearly double, reaching DKK 30 billion by 2028.
"Our EBIT forecasts remain below consensus across our forecast horizon, but imply EPS doubling from c.DKK 50 in 2024 to DKK 95-106 in 2028/29E," the analysts said.
For Deutsche Bahn, the divestment allows the company to refocus on its core domestic rail operations. Proceeds from the sale are expected to support debt reduction efforts at the state-owned rail operator.
Still, parting with Schenker may come at a cost—last year, the unit delivered an operating profit of around €1 billion, making it one of Deutsche Bahn’s most profitable divisions.
While DSV plans to retain some of Schenker’s key offices in Germany, the company expects to eliminate between 1,600 and 1,900 full-time administrative roles over the medium term.