News / After DSV 'cuts the cake' on Schenker acquisition, time for redundancies?

Golden Sikorka

Denmark’s DSV has formally closed its €14.3bn ($16.14bn) acquisition of DB Schenker – the biggest takeover in the sector this century – creating the world’s premier freight forwarder.

The mood was understandably celebratory at a conference call following the completion of the takeover of the subsidiary of German state railway-owned Deutsche Bahn, along with the expression of pride and achievement.

“If someone had told me 22 years ago, when I joined this company, that something like this would be possible, I would have found it hard to believe,” said CEO Jens Lund. “But we have come a long way since then, and I would like to extend a warm welcome to all of our new colleagues”.

However, he warned that integration would take some time and he added: “As we embark on this new chapter in DSV’s story, we look forward to uniting the strengths of both companies and ‘Winning As One’.”

As to the financial impact of Schenker’s integration, CFO Michael Ebbe said that based on preliminary estimates, annual synergies were expected to be close to $1.4bn at the end of 2028, when the majority of the integration process would be complete.

Current Schenker CEO Jochen Thewes will join the DSV board, while several of his senior executive team have been appointed to leadership posts at the combined entity, including the head the Road division, group CCO and Group chief people officer. However, for some commentators, this hardly amounts to a ‘power share’, rather a token gesture or a minor concession.

A takeover of this magnitude obviously raises the prospect of overlap, resulting in redundancies, given that for many years DSV and Schenker, similar in size and portfolio of services, have been competing for the same business.

DSV has been relatively tight-lipped on the issue, limiting its comments to Schenker having “attractive exposure” to the air, sea, and road segments and “strengthening our position in Europe and adding scale in APAC and Americas.”

DSV did not reply to a request for information on the new senior executive set-up, in particular whether the heads of Schenker’s Air, Ocean, and Contract Logistics divisions were staying with the new entity.

There has often been speculation that previous DSV takeover deals resulted in a reduced headcount to improve profitability, although this has been consistently denied by the group.

One management consultant told The Loadstar: ”I think [DSV] has made a commitment not to implement any lay-offs in Germany for the next two years. However, this only relates to Germany. Moreover, it’s more than likely that some of Schenker’s employees in Germany have effectively lost their jobs, and have been left with the choice of sitting at their desks twiddling their thumbs for the next two years, or quitting.

“While I’m not suggesting this is DSV’s routine modus operandi when it comes to takeovers, but just because there is a commitment to not incur any lay-offs in Germany, it doesn’t mean that it won’t happen.”

He explained that it was reasonable to assume that well before the transaction was announced, Schenker staff had been aware of of the likelihood of DSV acquiring the business and the implications for them. Also, other forwarders, looking to enhance their country or specialist verticals teams, were alerted to the possibility of a good deal of high-level talent becoming available.

“Schenker staff have been approached and a lot of them have already quit. I can’t put a figure on the departures, but what would you do if you were working for Schenker in a country where DSV also has operations, and you heard from acquaintances about what happened at Panalpina and Agility GIL (two of DSV’s previous purchases) a year or two after the acquisition?”