DEUTSCHE BAHN ACQUIRES 65% STAKE IN PARENT OF SCHENKER

DEUTSCHE BAHN ACQUIRES 65% STAKE IN PARENT OF SCHENKER

   Deutsche Bahn AG, Europe’s largest railroad, has secured a 65-percent stake in German logistics group Stinnes AG, the parent company of the international forwarding and logistics company Schenker.

   This agreement of E.ON AG, the energy services company that owns 65-percent of Stinnes, to sell its entire stake in Stinnes for approximately 1.6 billion euro (about $1.6 billion), is a major step in Deutsche Bahn’s proposed $2.5-billion takeover of the logistics group.

   E.ON said that the transaction is expected to be completed in the fall of 2002.

   Deutsche Bahn must now obtain antitrust approval and consent under Germany’s Federal Budget Code.

   The German railroad offered to pay 32.75 per share (about $32) in cash for all Stinnes stock. The takeover of Stinnes is valued at about 2.5 billion euro ($2.5 billion).

   Stinnes, including its transportation arm Schenker, is one of the largest logistics and forwarding groups in Europe. Stinnes has annual revenues of about 12.3 billion euro ($12 billion) and about 43,000 employees at over 1,300 locations worldwide. Besides logistics and transportation, the other activities of Stinnes are chemicals and materials.

   Schenker, with annual revenues of 6.2 billion euro ($6.1 billion), provides land transport, air and sea freight services, as well as logistics services and global supply chain management from a single source. Some 33,000 employees work for the German forwarding and logistics group.

   Schenker does not disclose figures on its international ocean and air freight traffic. In June, Schenker announced the purchase of Anterisk & Schneider, a German logistics company with annual sales of about 130 million euro ($127 million).

   A spokesman for Schenker said that he could not comment on the impact of the Deutsche Bahn takeover on its operations.

   Deutsche Bahn, the state-owned railway company headquartered in Berlin, has annual revenues of 15.7 billion euro ($15.4 billion) and some 214,000 staff. It lost 406 million euro ($398 million) in 2001.

   The combination of Deutsche Bahn and Stinnes will create a giant group that would rank as the world’s third largest transportation and logistics group, behind Deutsche Post and United Parcel Service.

   Deutsche Post said that the takeover of Stinnes will complement its freight services, adding logistics services to its existing carrier services. Deutsche Bahn sold Schenker to Stinnes in 1991. Stinnes had an initial public offering in 1999. The takeover will return Schenker to the state sector.

   Last week (in early July), Stinnes expressed positive initial views on the proposed takeover bid by Deutsche Bahn.

   “The board of management of Stinnes AG feels that the offer of price of 32.75 euro per share announced by Deutsche Bahn is attractive,” Stinnes said. Stinnes’ management and supervisory board “will comment on all major aspects of the offer submitted by Deutsche Bahn as soon as they have the offer document, which is expected to be available in the first half of the month of August,” the company said.

   The takeover of Schenker represents another big consolidation step in the logistics business by large German groups.

   Between 1998 and 2000, Deutsche Post acquired Danzas for $1.1 billion and Air Express International Corp. for $1.14 billion.