Saudi Arabia’s Bahri drops out of race for Deutsche Bahn’s Schenker

Saudi Arabia’s Bahri has dropped its bid for German rail operator Deutsche Bahn’s logistics unit Schenker, narrowing the field to DSV and CVC, two people familiar with the sale told Reuters on Thursday.

The departure means state-owned Deutsche Bahn, which last year put Schenker up for sale to reduce its debt, needs to lower its sights on proceeds because Bahri’s offer, at more than $16.4bn (EUR15bn), was the highest, the sources said.

Final bids are due at the end of August, they added.

The lower bound of the bidding range so far was at about EUR13bn, sources have told Reuters.

Deutsche Bahn, with more than EUR34bn in debt, said it would not comment on individual suitors as a matter of principle.

The Saudi company, which is also known as the National Shipping Company of Saudi Arabia, did not immediately respond to a request for comment.

Danish shipping group Maersk said earlier this month it was no longer interested in buying Schenker, citing “areas of challenges from an integration perspective”.

CVC has been pursuing the business in a consortium with Abu Dhabi Investment Authority (ADIA) and investor GIC, sources have said.

According to research group Technavio, the global third-party logistics market is estimated to grow by more than $500bn from 2023 to 2027, driven by e-commerce and integrated shipping services.

High operational costs and competitive pricing are seen as challenges for the sector. Schenker competes with AP Moller Maersk, Baltic Logistics Group, Kuehne&Nagel, and DHL, among others.

Schenker has over 70,000 employees in around 130 countries worldwide, including about 15,000 in Germany.

Read: ADIA backed CVC, Saudi’s Bahri in final round of Deutsche Bahn Schenker sale